COUNTRY COMMERCIAL GUIDE FY 2004

GERMANY Country Commercial Guides can be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export information and assistance or country-specific commercial information should consult with their nearest Export Assistance Center or the U.S. Department of Commerce’s Trade Information Center at (800) USA-TRADE, or go to the following web site: www.export.gov.

Table of Contents 1: EXECUTIVE SUMMARY ...................................................................................................... 2

2: ECONOMIC TRENDS AND OUTLOOK ............................................................................... 3

3: POLITICAL ENVIRONMENT ................................................................................................ 5

4: MARKETING U.S. PRODUCTS AND SERVICES............................................................... 6

5: LEADING INDUSTRY SECTORS FOR U.S. EXPORTS AND INVESTMENT................... 10

6: TRADE REGULATIONS, CUSTOMS AND STANDARDS ................................................. 17

7: INVESTMENT CLIMATE STATEMENT ............................................................................. 21

8: TRADE AND PROJECT FINANCING................................................................................ 28

9: BUSINESS TRAVEL ........................................................................................................... 28

10: ECONOMIC AND TRADE STATISTICS........................................................................... 30

11: U.S. AND COUNTRY CONTACTS................................................................................... 31

13: TRADE EVENT SCHEDULE ............................................................................................ 39

Preparation date: July 15, 2003 International copyright, U.S. & Foreign Commercial Service and the U.S. Department of State, 2003. All rights reserved outside of the United States.

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1: EXECUTIVE SUMMARY

This Country Commercial Guide (CCG) presents a comprehensive look at Germany’s commercial environment, using economic, political and market analysis. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. embassies through the combined efforts of several U.S. government agencies. The German economy is the world's third largest, and accounts for about one-third of the European Union’s GDP. Germany is the United States' largest European trading partner and fifth largest global partner. Germany practices a "social market" economy that largely follows free-market principles but with a considerable degree of government regulation and generous social welfare protection. The German government forecasts a 0.75 percent increase in GDP for 2003 after a slight 0.2 percent gain last year. However, many analysts regard the government's expectations as overly optimistic and forecast flat growth for 2003. Domestic demand will likely give only a minor impulse for economic growth in 2003, with German exports providing the most promising sector despite the Euro’s appreciation against the Dollar. In March 2003, half a year after Chancellor Schroeder’s re-election in the September 2002, the Chancellor presented a blueprint for economic and structural reform, boosting economic growth and employment. The proposed reforms, termed "Agenda 2010," aim to stimulate job creation as well as call for cost-cutting measures in social sectors such as pensions, health care, and welfare. The government has also proposed accelerating tax rate reductions scheduled for 2005. High unemployment is Germany’s most sensitive political and economic issue. Unemployment rose to 4.3 million in May 2003, exceeding 10 percent of the labor force. Structural factors are largely to blame for continuing high joblessness, factors the government has only recently begun to redress through labor reforms and job creation measures. Significant differences remain between unemployment in the eastern and western states of Germany. The unemployment rate in the western states was 8.2 percent, while the comparable figure for the eastern states is 18.6 percent. Moreover, long-term unemployment remains a component in Germany’s overall unemployment levels. The German market, America’s largest export market in Europe, continues to have numerous attractive sectors, and remains an important component of any comprehensive European export strategy. For U.S. exporters, Germany holds a market advantage that few countries can match. More world-class trade events are held in Germany than any other location in Europe, and quite possibly in the world. As one example, CeBIT (computers and telecom) the world’s largest trade event, draws over 750,000 visitors and 7,000 exhibitors annually, with significant participation from the Asia, Latin America, and Africa. Similar caliber events in many industrial sectors make Germany an international marketing crossroad, permitting U.S. exporters to cover German, European as well as global prospects in one location. A summary of major German trade events supported by the Commercial Service is noted in Section 13 of this document. U.S. investors at the same time can count on high levels of productivity, a highly skilled labor force, quality engineering, first-class infrastructure, and a location in the heart of Europe. However, as for any international location, investment considerations should be conducted with professional assistance and based on thorough analysis. Germans appreciate innovation and high technology, particularly in the consumer goods sectors. New solutions in the multi-media, high- tech and service areas that will help more Germans join the Internet generation offer great potential. U.S. products that offer cutting-edge technology such as computer software, electronic components, health care and medical devices, synthetic materials and automotive technology are especially highly regarded. Price will not always be the determining factor for the German buyer, especially for inputs in the intermediate stages of production, where the manufacturer cares deeply about his own product and service reputation. In approaching the German market, exporters should recognize that the market is as decentralized and diverse as the United States. Bavarian and Rhineland tastes, for example, differ markedly. An American company seeking sales in Germany is strongly advised to take into account such regional differences. Generally speaking, U.S. exporters who seek to support clients from a single European location, or directly from the United States are at a disadvantage given German and other European competitors who have the advantage of proximity. However, unique products, high quality products and service, or the right price may offset such factors.

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With the exception of the EU Common Agricultural Policy, Germany presents few formal barriers to U.S. trade or investment interests. Germany's regulations and bureaucratic procedures, however, can prove a baffling maze, blunting the enthusiasm of U.S. exporters and investors. While not discriminatory, government regulation is often complex and may offer a degree of protection to already-established local suppliers. Safety or environmental standards, not inherently discriminatory but sometimes zealously applied, can complicate access to the market for U.S. products. American companies interested in exporting to Germany should conduct thorough market research as well as identify relevant standards and obtain timely testing and certification. For U.S. exporters looking to market across the European Union, satisfying German standards may prove to be beneficial given that EU-wide standards are frequently based on German practice. Further information on Germany can be found at the U.S. Commercial Service Germany website http://www.buyusa.de/en. Information on other European markets can be found on the "Showcase Europe" homepage: http://www.buyusa.gov/europe. This is a comprehensive source for market research and business counseling information designed for U.S. exporters interested in the European marketplace. 2: ECONOMIC TRENDS AND OUTLOOK

Introduction Germany's strong post-war economic growth has afforded its citizens one of the highest standards of living in the world. At the same time, Germany supports one of the most comprehensive and generous social safety nets in the industrialized world. The German "social market" economy is based largely on free market principles, but critical labor, wage and regulatory decisions are the result of a consensus between government, business and labor. While the system has served Germany well and remains relatively popular, the German economy today faces serious issues including persistent slow growth, persistently high unemployment, high outstanding government debt, an increasing share of government revenues going for debt service payments, high tax rates, continued high net transfer payments to eastern Germany, high unit labor costs, and growing social security and non-wage labor costs. These problems and the resulting concerns over Germany's attractiveness as an investment site have underscored the need for changes in the government’s economic, fiscal and social policy course, towards budget consolidation and structural reforms. For 2003, Germany continues to suffer from economic stagnation. Clear signals for a significant upswing are not in sight and the trend toward rising unemployment remains.

Economic Forecast The German government forecasts a 0.75 percent increase in GDP for 2003 after a slight 0.2 percent gain last year. However, many analysts regard the government's expectations as overly optimistic and forecast a growth rate of only about 0.5 percent. The most recent calculations indicate the continuation of economic stagnation in this year, with growth rates close to zero. Domestic demand will likely give only a minor impulse for economic growth in 2003. As in recent years, exports provide the most promise despite the Euro appreciation against the Dollar. Consumer price inflation declined to about 1 percent in the first half of 2003. Mainly due to economic stagnation, the number of unemployed continued to rise to 4.3 million by May 2003 and the unemployment rate hovers around 10.5 percent of the labor force (using German calculation methods). There continues to be a significant difference between unemployment in the eastern and western states of Germany. The unemployment rate in the western states was only 8.2 percent in May 2003, while the comparable figure for the eastern states was 18.6 percent.

Economic Policy Environment In March 2003, half a year after his re-election in the September 2002 parliamentary elections, Chancellor Schroeder presented his blueprint for economic and structural reform, targeting economic growth and employment. Persistent economic sluggishness and two lost state elections in Lower-Saxony and Hesse earlier this year drove the Social Democrats and their coalition partner, the Greens, to develop a major reform package, termed "Agenda 2010. The package includes measures for jobholders and job seekers, greater labor market flexibility and cost-saving measures in social services and welfare benefits. Initially “Agenda 2010” received strong criticism from both labor unions and SPD left-wingers, however, despite criticism, the government held firm and avoided substantial changes in the program. Scheduled to come into effect in 2004, these reforms could serve as a necessary first step in restoring confidence in the government's ability to tackle structural economic problems and high unemployment. The agenda calls for a deregulation of the crafts sector to increase competition in this over-regulated part of the economy. A reform of the local authority financial system is planned to solve significant municipal level budget problems.

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Social Security Reforms The rapid aging of the German population will put enormous financial pressure on the public pay-as-you-go social security system. Absent major reform, an imminent sharp decline in the ratio of active workers to retirees will force the current system to raise employee and employer contributions or reduce benefits. Already the government has to fund from general tax revenues obligations for former East Germans who reached retirement age without ever contributing to the West German social security system. The government has therefore enacted pension reforms that contain limits to benefits from the public system. However, additional reform measures are needed to cut costs and keep the pension system sustainable. As part of its "Agenda 2010" reform package, the German Government approved a set of bills in mid-August which include the restructuring of the Federal Employment Institute, the merger of unemployment assistance and social welfare benefits, and reform of community finances. A proposal for a reform of the statutory health care system that aims to reduce labor-related costs of the social security system has already been negotiated between the government and major opposition parties. Most of the government’s proposals require the approval of the parliament, including the opposition-dominated Bundesrat, the second chamber representing state governments, before they can be cast into legislation. While an outright blockade by the CDU/CSU opposition seems unlikely, significant changes to the proposals in the upcoming legislative process can be expected given the strong criticism from opposition parties, trade unions, charitable organizations, regional and local governments. Labor Market The performance of the German labor market during the 1990s, measured by the level and growth of job creation and unemployment, was weaker than in most other comparable countries. The difficult situation in Eastern Germany was a major, but not the only, reason for this situation. In addition to lower-than-average workforce participation and levels of employment, the German labor market suffers from numerous structural problems. For example, the portion of long-term unemployed (i.e., over one year) is high, while the employment rate for low-skilled workers is low. Unemployment is particularly high among women, low-skilled and older workers, who are often “pushed” from the primary labor market into the social welfare system. Also, the relatively low level of flexibility in the German labor market is an important factor in Germany’s employment picture. There are, of course, other significant factors, including macroeconomic issues. Comparatively strong protection against dismissals, coupled with strict regulation of fixed-term and temporary employment contracts protects a company’s core work force, but hampers the transparency of the employment system and leads to segmentation of the labor market. This development has mainly affected young people and women, and increases the risk of long-term unemployment. In addition, factors such as limited acceptance of older workers, as well as “structural mismatches” in the supply and demand of skilled workers also contribute to Germany’s persistently high unemployment. The ineffectiveness of Germany’s various labor market support programs (too much emphasis on providing for the unemployed and too little emphasis on incentives for work) was another factor contributing to unemployment. While Germany’s high non-wage labor costs have a clearly negative impact on employment, the effects of Germany’s system of wage determination of multi-company, industry-wide contracts on the labor market are less clear. In order to adapt to the challenges of globalization, many of these contracts have been revised in recent years. They include not only highly flexible working time arrangements in nearly all industry sectors (including so-called corridor solutions in the chemical industry, for example, where workers may work longer or shorter hours than the regular 37.5-hour workweek without additional costs for the employers), but also have introduced escape clauses for ailing companies (i.e., the metal industry in East Germany), lower entrance pay scales, and performance-based annual bonuses. The Master Agreement for the metal industry in Baden-Wuerttemberg, for example, gives 384 possibilities to deviate from the normal 35-hour week. The new BMW plant in Leipzig has a highly sophisticated working time regime, under which workers can work on Saturdays, longer hours, or consecutive shifts, etc. This means, in essence, the BMW plant can operate about 150 hours a week. Moreover, coverage under a collective agreement has been declining in recent years. In all of Germany, multi-company, industry-wide contracts cover about 43.4 percent of all firms; 5.3 percent are covered by a company-level agreement; and 51.3 percent are not covered at all. An East-West comparison shows that 66.6 percent of the firms in the East are not covered by a collective agreement vs. 47.5 percent of the companies in the West. Differentiated by workers covered by a collective agreement, the ratio of covered/uncovered workers is 73.6 vs. 26.4 percent for all of Germany. Again, the coverage is higher in the West than in the East (75.8 vs. 63.2 percent). Despite high unemployment, serious labor shortages exist in many high-skilled fields. The government has tried to address these shortages through a “Green Card” program that has made available 20,000 work visas to foreign IT workers, although the slump in the telecommunications/IT field has sharply reduced use of this program in the past year. In addition, a new immigration bill was signed into law by the President in June 2002, but the Federal Constitutional Court overturned it on

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procedural grounds. The government has re-submitted the legislation. The Chancellor and his coalition face pressures from many sides to move forward with labor market reform. Not the least among the challenges is an aging population that is not even replacing itself. Budget and Tax Policy The government has practiced strict spending restraint in an effort to reduce the budget deficit. Nevertheless, despite efforts to rein in spending in the 2003 budget, current government plans assume unrealistically strong growth. The total deficit (including social security) rose to 3.6 percent in 2002 and thus exceeded the Maastricht 3 percent of GDP limit. In May 2003, an official working group of tax forecasters presented its latest projection, predicting much larger than expected holes in government budgets. For 2003, the additional shortfall amounts to 8.7 billion EURs. This figure, together with the higher than expected government expenditures caused by the deteriorating labor market situation, has made the government forecast of a 2.8 percent budget deficit in 2003 already obsolete. Germany will exceed the 3 percent GDP limit of the EU Stability and Growth Pact for the second time in a row. Total government debt (60.8 percent in 2002) was just slightly above the Maastricht limit of 60 percent of GDP, and will continue to rise gradually this year. Mindful of the impact of high tax rates on the German investment climate, the government enacted in July 2000 tax reforms including sharp tax cuts. These reforms cut corporate income tax rates, reduced personal income tax rates, sought to broaden the tax base by closing some tax loopholes, and eliminated capital gains tax on sales of equity holdings by one corporation to another corporation as of January 1, 2002. The next tranche of income tax cuts is planned for 2004. 3: POLITICAL ENVIRONMENT Overview Despite recent disagreements over the issue of Iraq, U.S.-German relations are deep and broad ranging, with strong ties in almost every level of the relationship. German-American political, economic, and security relationships have historically been based on close consultation and coordination at the most senior levels. There are positive indications that these relationships will continue to improve in the wake of differing approaches to Iraq. High-level visits regularly take place, and the United States and the FRG cooperate actively on a wide range of international issues. U.S. Government officials enjoy good access to policy- and decision-makers, and are able to raise issues directly affecting U.S. businesses in Germany. Maintaining economic growth and fostering the continued development of eastern Germany are economic priorities for the German government that also have political implications. The states of the former German Democratic Republic (East Germany) contain millions of voters, and the government is continuing its ongoing efforts to bring them up to the economic standards of western Germany as quickly as possible. Accordingly, a high priority is placed on financing eastern development, implying the likelihood of a flow of major project opportunities for years to come. In addition, Germany's political leadership also wants to promote Germany's competitiveness and various proposals are being considered to modernize the country's economic infrastructure. Since unification on October 3, 1990, Germany has placed special emphasis on improving its relations with its directly neighboring states as well as strengthening transatlantic relations. Recognizing that political stability is nurtured by economic prosperity, Germany has been one of the major sources of assistance to Central European and CIS states. Germany is a member of the European Union. Basic Government Structure Under the German Constitution, known as the Basic Law, the Federal Republic of German (FRG) is a parliamentary democracy with a bicameral legislature, an independent judiciary and executive power exercised by a Prime Minister whose title is Chancellor. The lower house of Parliament, the Bundestag, currently consists of 598 deputies elected for a 4-year term. Members are elected through a mixture of a direct vote for constituency candidates and a second vote for party lists. The federal and state electoral laws stipulate that parties must receive at least five percent of the national vote (or at least three directly elected seats in federal elections) in order to be entitled to full proportional representation in the federal and state parliaments. National elections on September 22, 2002 returned the incumbent Social Democratic-Greens coalition to power under Chancellor Gerhard Schroeder. One must be 18-years old to vote in Germany. The Federal President, whose duties as Chief of State are largely ceremonial, may be elected to two five-year terms. Executive power is exercised by the Chancellor who is elected by and responsible to the Bundestag. The Chancellor cannot be removed from office during a four-year term unless the Bundestag has agreed on a successor.

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The upper house, the Bundesrat, comprising 69 members, is composed of delegations from the 16 state governments. Each state has between three and six votes, depending on its population. The role of the Bundesrat is limited, but it can veto or engage in revision of legislation passed in the Bundestag when the proposed legislation would impose or affect the responsibilities of the states. Among these are matters relating to tax reform, law enforcement and the courts, culture and education, the environment, and social assistance. The political parties represented in the Bundestag are: The Social Democratic Party (SPD), which abandoned the concept of a strictly working class party in 1959 while continuing to stress social welfare programs. The SPD heads the federal government that took office in October 1998, and which was reelected in 2002 under Chancellor Schroeder. The Christian Democratic Union and its Bavarian sister party, the Christian Social Union (CDU/CSU are generally conservative on economic and social policy. The Alliance 90/The Greens (Buendnis 90/Die Gruenen), which has an environmentalist, pacifist platform, is the junior partner in the current federal coalition government. The liberal Free Democratic Party (FDP) identifies itself as a market-oriented, civil libertarian party. Additionally, two directly elected representatives of the Party of Democratic Socialism (PDS), the successor party to the communist party of the former German Democratic Republic, sit in the Bundestag. The failure of the PDS to clear the five-percent hurdle in the 2002 elections means that the party was not entitled to its full proportional representation. 4: MARKETING U.S. PRODUCTS AND SERVICES Overview U.S. companies intending to export to Germany must take into account the commercial context. To a far greater degree than its European neighbors, Germany's population and industry are decentralized and evenly distributed. Major cities and businesses dot the countryside in a landscape that features no single business center. Often U.S. companies seem to seek to cover Europe from a single European base, or even through periodic visits from the United States. The German commercial customer at the same time expects to be able to pick up the telephone, talk to his or her dealer, and have replacement parts or service work immediately available. U.S. exporters should avoid appointing distributors with impossibly large geographic areas, without firm commitments regarding parts inventories or service capabilities, and without agreements on dealer mark-ups.

Success in the German market, as elsewhere around the world, requires long-term commitment to market development and sales back-up, especially if U.S. companies are to overcome the geographic handicap with respect to European competitors. Germans at times perceive U.S. suppliers as being quick to defer processing an export order in favor of a subsequent domestic order, or to bypass a successful distributor to deal directly with his customer. Some German entrepreneurs with selective experience with U.S. companies are skeptical about their long-term commitment and after-sales support. U.S. firms entering Germany today are generally aware of the factors that make for a successful export relationship and are ready to establish a credible support network. However, U.S. firms should be ready to address any lingering doubts from prospective German clients/partners.

Services Services are playing an increasingly important role for Germany’s economy. In many studies and reports, the United States has been portrayed as a good example of a service-oriented economy, and many experts believe that a focus on these sectors will provide Germany with an opportunity to significantly reduce unemployment. Despite a still existing reluctance among the workforce, which is traditionally oriented towards manufacturing and industrial processes, growth potential for and the importance of the service sector is considerable.

In 2002, the portion of the country’s GDP accumulated in the service sector reached EUR billion 1,379.12 – approximately 70% of the total GDP. Since many manufacturing businesses satisfy their demand for services internally, this figure does not correctly reflect the importance of the services sector for Germany. The German Federal Economics Ministry estimates that services account for more than 70% of all jobs, a figure slightly below the comparable indicator in the United States.

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In many areas, the German government follows EU stipulations opening up service markets, such as telecommunications, postal services, the rail system or energy, which may offer potential for U.S., competition. Other sectors, such as the water industry or road haulage may appear to be in general open to competition, but do not at a first glance lend themselves easily to U.S. involvement.

The German government prides itself for having established a liberal, open telecommunications market, following the deregulation of voice telephony in 1998. The number of telecommunication service providers has risen from 1,200 in early 1998 to more than 1,700 - many of them American - and, according to government sources, these companies have created more than 53,000 new jobs. Currently, however, the German telecommunications and IT industries are facing adverse conditions. Due to the overall global downturn in this industry as well as the continued dominance of Deutsche Telekom AG (which itself has seen its share prices decline to an all-time low), many companies that have entered the market enthusiastically have unfortunately closed their doors. Even under better economic conditions, the situation of the services industry leaves room for improvement. U.S. companies considering entering the German services market should be aware that the still comparatively high tax rates despite modest cuts and complicated tax laws may constitute an obstacle to investors, although deductions, allowances and write-offs help to move effective tax rates to more internationally competitive levels.

Trade Fairs No business visitor or company wishing to export to Germany can fail to note that trade fairs play a crucial role in marketing in this country, a role perhaps unique in the world. This is not too surprising when one considers that the trade fair movement was born in Germany in the Middle Ages and that, even today, a major portion of the truly world-class vertical fairs take place within Germany's borders, attracting buyers from around the world. During any given year, one or more major trade fairs will be staged in Germany for almost any product or service. Trade fairs thrive in Germany because they are occasions on which business is actively done, rather than serving simply as public relations venues. U.S. exhibitors at German fairs should bring their order books and be prepared to sell. While U.S. exhibitors and even visitors can often conclude transactions, all attendees can use the great German fairs to conduct market research, see what their worldwide competition is doing, and test pricing strategies. The German fairs should not be thought of as strictly venues for doing business in Germany. The major shows attract buyers from throughout the world, allowing U.S. exhibitors do business here with buyers from Europe, Asia, Africa, Latin America and even with other U.S. companies.

While both CeBIT 2003, the world's largest computer and telecommunications show, and the 2003 Hannover Trade Fair, the world's largest industrial trade fair of any kind, suffered from the September 11 aftermath, the Iraq crisis and the burst of the telecom bubble, trade fairs in general still saw impressive numbers of visitors and exhibitors. This confirms the conviction that there is no other venue where an American company can get so much product exposure for its marketing dollar. Trade fairs also provide a U.S. company interested in entering Germany with the opportunity to research its market and the potential of its product properly before making a business decision, which is advisable in any case. Not all products can be easily sold and, even in a high-priced country such as Germany, it is important to attach the right price tag to a product.

The promotion of U.S. participation at German trade fairs is an essential part of "Showcase Europe", a field-driven initiative that is designed to pay tribute to the ongoing integration of a single Europe. “Showcase Europe” concentrates on the following sectors of strategic interest: Aerospace; Energy; Medical Equipment, including Drugs and Pharmaceuticals; Telecommunications and Information Technologies; Environmental Technologies and Equipment; Franchising; and Travel and Tourism. At selected fairs, for example, U.S. Embassy staff offer U.S. companies a wide range of programs matching their interests with potential German business partners as well as with visitors from other European countries. "Showcase Europe" also focuses on advocacy on behalf of U.S. business interests and concentrates on further opening the markets in the above listed sectors to U.S. companies, including official U.S. government advocacy on behalf of American firms bidding on German procurement projects.

Advertising In addition to exhibiting at a German trade fair, in most cases a strong factor in a broad-based marketing program. Regulation of advertising in Germany is a mix between basic rules and voluntary guidelines developed by the major industry associations. Legal rules were established at the beginning of the 20th century by the "Law Against Unfair Competition". Although it has been modified over time, this law continues to be valid today. In essence, this law allows competitors to bring suit if advertising "violates good manners".

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Many advertising practices that are common in the United States, such as offering premiums, are not allowed in Germany. Any planned advertising campaigns should be discussed with a potential business partner or an advertising agency in Germany. Following is the address of the German association of advertising agencies:

Gesamtverband Kommunikationsagenturen e.V. (German Association of Advertising Agencies) Friedensstr. 11 60311 Frankfurt a.M. Telephone: [49][69] 2560080 Telefax: [49][69] 236883 www.gwa.de

There are numerous technical or specialized periodicals that deal with all aspects of technology and doing business in Germany. In addition, Germany has a well-developed array of newspapers and magazines, which offer the opportunity to gather information and advertise products and services.

Associations Nearly all facets of doing business in Germany have a relevant industry or trade association and can often serve as a suitable point of contact when trying to establish a partnership.

Public Procurement Selling to German government entities is not always an easy process. However, although there has been a delay in implementing all facets of the EU Utility Directive, in general, German government procurement is non-discriminatory and ostensibly complies with the GATT Agreement on Government Procurement (the Procurement Code) and the European Community's procurement directives. That said, it is a major challenge to compete head-to-head with major German or other EU suppliers who have established long-term ties with purchasing entities.

Marketing to the New Federal States While market conditions in the new and old federal states of the reunited Germany continue to converge impressively, U.S. exporters and potential investors should, nonetheless, be aware that the new federal states of eastern Germany still present, in certain respects, distinctive commercial opportunities and challenges.

For instance, while promotion and investment assistance provided by the German Federal Government usually covers the entire territory of Germany, some programs and terms are more favorable in the new federal states as part of the government-led effort to transform these states of the former East Germany to a market economy. Additionally, at both the federal and state level there are investment grants, special depreciation and credit programs, and regional promotions, which apply specifically to the new federal states.

One regional promotion initiative of particular interest to U.S. firms interested in market opportunities in the new federal states is the Industrial Investment Council of the New German States (IIC). Through extensive market research, the IIC has identified the distinctive commercial conditions which set eastern Germany apart as a favorable commercial destination for major U.S. investors as well as for U.S. exporters. Among some of the distinctive conditions which IIC’s market research is highlighting for the new federal states are: wage and labor flexibility across the board; local flexibility in accommodating major infrastructure projects; technical, workforce, and niche R&D capabilities along with transportation logistics and distribution advantages; etc.

E-Commerce Germany’s Internet commerce market leads Europe and is among the world’s most sophisticated, totaling EUR 88 billion in 2002. It is expected to grow to EUR 676 billion by 2006. The use of the Internet by individuals and businesses in Germany is continuing to expand. More than 50 percent, or 32.1 million Germans older than 14 years were online in June 2003. This percentage is expected to grow to 68 percent by the end of 2006. Business-to-business (B2B) commerce accounted for EUR 78 billion in 2002 and projected to grow to EUR 604 billion by 2006. Business-to-Consumer (B2C) commerce accounted for EUR 9.5 billion in 2002 and forecasts believe it will grow to 72 billion in 2006. About 2.1 percent of German retail transactions will be online sales in 2003, up from 1.6 percent in 2002.

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B2C – 68 percent of Germans with Internet access realized at least one business transaction via the Internet. Favorite purchases are airline tickets, electronic devices, computer equipment, books, music CDs and DVDs. Primarily larger firms such as Amazon, Otto, Quelle, Tchibo, Conrad, and Ebay have increased their online sales. Retailers without “physical” retail stores or those lacking brand recognition sometimes encounter difficulties when trying to win the trust of German customers. Besides trust, price and product diversity are the most important competitive factors. Selling groceries over the Internet, for example, has not proven to be successful: Tough price competition and small margins do not leave retailers with enough capital to invest in alternative distribution channels. B2B – Almost all German small and medium sized businesses have Internet access. Online transactions are growing and Customer and Partner Relationship Management are becoming increasingly important; public marketplaces, however, are losing attraction. Most e-commerce strategies focus on a quick return on investment. The major channel for B2B transactions remains the traditional Electronic Data Interchange. For the future, experts believe that high-quality brand-name articles and automotive products will be increasingly sold via the net. Major users of B2B solutions are the automotive, retail, energy, and pharmaceutical/ chemical production industries Financial Services – Germans are heavy users of banking and financial sites and increasingly trust online banking services. Most German banks offer online services. E-Government - Germany offers a good number of e-government services but there is considerable scope for improvement. The German federal government plans to put all Internet-capable services of 350 federal agencies online by 2005 (www.bundonline2005.de). The central German government online procurement website e-Vergabe was launched in 2002 (www.e-vergabe.bund.de).

Marketing U.S. Agricultural Products The Foreign Agricultural Service (FAS), of the U.S. Department of Agriculture (USDA) maintains an Agricultural Affairs Office in the American Embassy in Berlin. Services include trade contacts for German buyers looking for U.S. food and beverage products, market briefs to help U.S. firms enter and compete in the German food market, promotional materials for U.S. foods, a directory of American food suppliers in Europe, information on German food law, and trade show assistance for U.S. suppliers. The Agricultural Affairs Office is also responsible for agricultural trade issues such as reform of farm support, food aid and biotechnology. Agricultural Affairs Office American Embassy/Berlin Clayallee 170 14195 Berlin, Germany Tel: [49][30] 8305-1150 Fax: [49][30] 8431-1935 Email: Agberlin@usda.gov http://www.usembassy.de/trade/index.htm A primary objective of the Agricultural Affairs Office is to facilitate trade in U.S. agricultural products. To meet this goal, they provide the following support and services: • Trade Leads: Designed for German buyers looking to purchase specific U.S. products. More than 36,000 U.S. firms

receive trade leads through this system each week. • U.S. Supplier Listings: Lists of U.S. suppliers for use by potential German buyers. • Buyer Alert: Lists of specific products being offered by U.S. exporters. • German Importers: Lists of German importers, by product sector, for use by U.S. exporters. • Attache Reports: Market briefs on select commodities such as fish, wine, and forestry products; basic information on

exporting agricultural products to Germany; and reports on the retail, and food-processing sector in Germany. • USA Promotions: Decoration and other promotional materials for use in special USA promotions. • Trade Shows: Information on key trade shows being held in Germany. Also, coordinate special USA pavilions at certain

food shows in Germany, and organize and recruit German buyers for U.S. food and agricultural trade shows. • American Food Directory: Extensive listings of U.S. food and beverage products imported and available for sale in

Germany. (http://www.american-foods.org/) • The Agricultural Affairs office also works closely with numerous U.S. agricultural trade associations and U.S. firms

conducting programs designed to boost foreign demand for U.S. agricultural products.

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5: LEADING INDUSTRY SECTORS FOR U.S. EXPORTS AND INVESTMENT (All figures are USD million; exchange rate used: USD 1 equals EUR1; (e) = estimated) (Also: please note that U.S. export figures below may include all products sold as well as transshipped through Germany; figures may also represent estimates of trade association and trade specialists for that sector and not necessarily official levels)

1 Computer Software 2 Computer Services 3 Computer & Peripheral Equipment 4 Drugs & Pharmaceuticals 5 Medical Equipment 6 Management Consulting Services 7 Electronic Components 8 Industrial Chemicals 9 Automotive Parts and Services 10 Franchising 11 Telecommunications Equipment 12 Air Conditioning and Refrigeration 13 Sporting Goods 14 Travel & Tourism 15 Biotechnology 16 Scientific and Lab Instruments 17 Electronic Industry Production and Test Equipment

1 Computer Software CSF For the first time in years, the German software market stagnated. This decline is attributed to the global economic weakness. The market is anticipated to slightly pick up again before the end of 2004. Driving factors for future growth are expected to be: Demand for security software, strong investments in Integrated Enterprise Applications to streamline back-and front-office operations, increasing investments in enterprise applications and e-business applications, primarily from SMEs. Contrary to previous forecasts, demand for CRM and SCM software declined significantly. Analysts estimate that approximately 80 percent of software products sold in Germany are imported, mainly from the United States. U.S. products still enjoy a good reputation for state-of-the art products. The majority of the large U.S. software developers have subsidiaries in Germany. There are no trade barriers obstructing sales of U.S. software. Industry-specific and niche products will continue to find good sales opportunities in Germany. However, as the European Union continues to expand as a single market, U.S. vendors will also meet growing competition from other European software vendors in the German software market.

2001 2002 2003 (e) A) Total market size 15,217 15,099 15,061B) Total local production 10,912 11,000 10,967C) Total exports 5,952 6,000 5,982D) Total imports 10,257 10,099 10,076E) Imports from the U.S. * 8,014 8,079 8,054 *) Please note: Import figures shown in this table also reflect the software sales of German subsidiaries of U.S. firms. There are no reliable direct import figures for software sales from the U.S. available, since software sales over the Internet cannot be traced. 2 Computer Services CSV In 2002, the market for IT services declined for the very first time ever. This decline is attributed to an overall weak economy. According to analysts, the sub-sector operations management services showed some growth, which, however, did not fully compensate for the decline in IT-consulting and implementation. The market is anticipated to grow in the 2 to 4 percent range in the near future. The major factor driving this growth is an increasing trend towards outsourcing. In addition, there is an increasing demand for security and e-business project services. Most large U.S. IT services providers have facilities in Germany, and, for official statistical purposes, are counted as local firms. Approximately 60 percent of the overall IT-services sales are attributed to German subsidiaries of U.S. firms. While competition from local companies exists, U.S. firms are often perceived as having more experience in the IT environment and, therefore, have a head start in the business. However, as the European Union continues to expand as a single market, U.S. computer services companies will also meet

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growing competition from other European countries, mainly from the United Kingdom, France and The Netherlands. 2001 2002 2003 (e)

A) Total sales 26,033 25,769 25,578B) Sales by local firms 11,235 10,636 11,056C) Sales by local firms abroad 4,684 4,638 4,605D) Sales by foreign-owned firms 19,482 19,771 19,127E) Sales by U.S.-owned firms 15,619 15,953 15,346 3 Computer & Peripheral Equipment CPT U.S. computer products are viewed as innovative products of superior quality and leading edge technology. Despite the current economic slowdown, IDC predicts Germany’s IT market will grow at a CAGR of 6.3 percent from 2003 through 2006 to reach USD 96.2 billion. The hardware market will rise at a sluggish CAGR of 3.0 percent, to reach USD 27.4 billion. Germany will account for approximately one quarter of west Europe’s IT market in 2005. The United States is expected to retain its 2002 import share of approximately 25 percent at least until 2004. Exports exceed production due to considerable amounts of imported equipment being directly resold abroad or included as value-added equipment in locally manufactured products that are exported.

2001 2002 2003 (e) A) Total market size 25,500 26,590 26,956B) Total local production 9,800 10,190 10,392C) Total exports 12,900 13,400 13,534D) Total imports 29,400 29,800 30,098E) Imports from the U.S. 6,850 7,700 7,670 4 Drugs & Pharmaceuticals DRG Germany is the world’s third-largest market for pharmaceuticals, behind the United States and Japan. Expectations for 2003 reflect modest production growth as a result of continued government health reforms. Still, the overall market will grow with 2-digit increases with the rising average life expectancy calling for more and more drugs. Major suppliers to the German market are the United States, France, Switzerland, Italy, the United Kingdom, and Ireland. With approximately 1,100 local suppliers, 59% of which are foreign-owned, the German pharmaceutical market is very competitive and price-oriented. Innovative and improved pharmaceuticals, generic and OTC products present best prospects for U.S. exporters. The “aut idem” substitution provision, in effect as of February 2002, and plans by the German government to open the market of mail order pharmaceuticals and allow for multiple ownership of pharmacies, will further encourage competition. The market is increasingly consumer-driven, with patients’ expenditures for non-reimbursable medication valued at roughly EUR 5.2 billion in 2002.

2001 2002 2003 (e) A) Total market size 20,100 24,440 28,440B) Total local production 20,200 21,210 21,640C) Total exports 19,200 20,640 22,000D) Total imports 19,100 23,870 28,800E) Imports from the U.S. 2,015 2,240 2,635 5 Medical Equipment MED The German market for medical devices is estimated at USD 14 billion, approximately 11% of total health expenditures. There are about 1,200 local medical device manufacturers, which produced medical devices valued at roughly USD 8.6 billion in 2002. As a result of health reform efforts and cost-containment measures, local production is expected to increase only moderately, with the total market size estimated to grow little over 2% in the year 2003. Because of a substantive investment backlog estimated at USD 10-15 billion in practices and hospitals, the medical device market is considered a growth market and will continue to provide excellent potential for U.S. suppliers of innovative and price-competitive products. U.S. medical device exporters to Germany hold a 30% market share and will continue to find excellent potential in Germany and other European countries. 2001 2002 2003 (e) A) Total market size 13,150 13,720 14,000B) Total local production 8,300 8,620 9,170C) Total exports 7,350 8,160 9,370D) Total imports 12,200 13,260 14,200

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E) Imports from the U.S. 3,700 4,080 4,260 6 Management Consulting Services MCS The sluggish German economy negatively affected the demand for management consulting services in Germany. 2002 saw a market decrease of 4.5 percent compared with 2001 to EUR 12.2 billion. In 2003, the market is expected to stagnate. Whereas the demand for traditional consulting services grew 11.3 percent and consulting services for organizational development also grew slightly, IT consulting (-20.1 percent) and personnel management consulting (- 15.0 percent) recorded drastic declines. Strategic planning also suffered losses. The top-40 management consulting companies holding a total market share of almost 50 % (2001: 50%) recorded a sales decrease of – 4.2%, medium-sized companies (market share 2002: 34 %) reported losses of – 4.7% on average. Small consulting firms (market share 2002: 16%) reported an average loss of - 4.8%.

2001 2002 2003 (e) A) Total sales 12,820 12,200 12,200B) Sales by local firms 6,510 6,110 6,110C) Sales by local firms abroad N/A N/A N/AD) Sales by foreign-owned firms 6,310 6,090 6,090E) Sales by U.S.-owned firms 5,110 4,890 4,890 7 Electronic Components ELC The negative market growth for electronic components in the previous two years will be followed by a positive growth of 8.6% to USD17.5 billion in 2003. Industry sources predict the German ELC market to continue this upward trend within all buyer segments. The German ELC industry has been able to retain its share of 6% of the world market while increasing its European market share to 31%. The active components market valued at USD10.6 billion in 2002, accounts for over 60% of the total ELC market in Germany. Passive components make up just under 10% of the market with USD 1.3 billion in sales. The market for electromechanical components (switches, plug connectors, printed circuits) is valued at USD 2.6 billion, 16% of the total market. Electronic sub-assemblies accounted for USD 21.71 million in sales, a total market share of 3.5%. Prime end-user sectors for electronic components in 2002 were the automotive industry (31.4%), the telecommunications (23.6%), data processing (21.6%), and industrial electronics (17.7.%). Future market expansion in Germany will be spurred by growth in automotive electronics (7.4%) and telecommunications (6.0%).

2001 2002 2003 (e) A) Total market size 18,460 16,113 17,502B) Total local production 17,294 16,091 17,097C) Total exports 16,884 15,866 16,500D) Total imports 18,050 15,888 16,905E) Imports from the U.S. 2,730 2,220 2,540 8 Industrial Chemicals ICH Germany is the largest chemical market in the EU accounting for 26 percent of the EU’s total chemical market. Over the past few months, the German chemical market suffered from the difficult global economic climate showing signs of stagnation. However, German imports from the United States in 2002 over 2001 increased in the following sub-sectors: colors and pigments (7.7 percent), pharmaceutical specialties (7.6 percent); glues (3.5 percent) and agricultural chemicals (mainly pesticides).

2001 2002 2003 (e) A) Total market size 76,800 80,700 83,500B) Total local production 100,100 102,200 104,000C) Total exports 79,100 76,800 76,000D) Total imports 55,800 55,300 55,500E) Imports from the U.S. 5,700 5,400 5,500 9 Automotive Parts and Services APS In 2002, exports of German-manufactured vehicles to the U.S. increased by over 8%, while in Germany automobile sales fell. As the stronger Euro crimped profits on exports to the U.S., German manufacturers came under pressure to compensate by increasing their sourcing of U.S. parts and systems, priced more competitively. Over the last years, many automobile dealers/workshops have gone out of business, or have merged, resulting in a drop in sales of traditional

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automotive workshop equipment. In the tuning sector, U.S. manufacturers are also under pressure, as German automobile manufacturers push sales of tuned and customized vehicles made in-house. Still, with all competitive aspects, German car manufacturers should remain preferential targets for U.S. suppliers of automotive parts and services.

2001 2002 2003 (e) A) Total market size 34,976 34,801 35,149B) Total local production 41,860 41,608 42,024C) Total exports 16,744 16,660 16,826D) Total imports 9,860 9,853 9,951E) Imports from the U.S. 1,711 1,796 1,885 10 Franchising FRA Germany is a mature franchise market in which local entrepreneurs have developed sophisticated concepts. At the end of 2002, there were 760 franchise systems represented by almost 41,200 franchisees. Compared to 2001, 1.3% more franchisers and 9.0% more units reflect a satisfying industry growth. In 2002, 47 American franchisers held a 10.4% share of the USD 23.9 billion franchise market. A high concentration of franchising chains in Germany can be found in the service sector (45%), trade (37%), building and handcraft (8%), and gastronomy (10). Industry sources expect best prospects to be in the areas of training and educational services; express delivery services (all types); theme bistros/restaurants; office management, accounting and tax services; maintenance, cleaning and sanitation services; advertising; telecommunication products and services; energy saving products and services; retail stores (specialized); home care services; environmental services. U.S. franchisers must be prepared to adapt to required market norms and standards, invest in market research, test market receptivity through pilot projects and adjust their concepts to German business practices and consumer tastes.

2001 2002 2003 (e) A) Total sales 22,700 23,850 23,715B) Sales by local firms 18,422 19486 19,342 C) Sales by local firms abroad 342 406 557D) Sales by foreign-owned firms 4,620 4,770 4,930E) Sales by U.S.-owned firms 2,383 2,483 2,532 11 Telecommunications Equipment TEL Despite the current turmoil and stagnation in the industry, the telecommunications industry is still widely regarded as one of the driving forces behind potential economic growth in Germany. Whether in the areas of multi-media, mobile communications, or the Internet, telecommunications is the key to unlocking German potential for future economic development. Germany has not only been one of the fastest growing markets for mobile equipment - there are more mobile than fixed-line subscribers - but is also very well prepared for any future technology in the telecommunications sector. Thousands of miles of high quality fiber optical cable make the country ready for the application of the future. The United States is Germany’s most important import source for telecommunications equipment.

2001 2002 2003 (e) A) Total market size 14,500 14,500 14,500B) Total local production 15,500 15,500 15,500C) Total exports 8,000 8,000 8,000D) Total imports 7,000 7,000 7,000E) Imports from the U.S. 1,300 1,300 1,300 12 Air Conditioning and Refrigeration ACR The German market for air conditioning and refrigeration is the largest in Europe. However, the industry suffered significantly from the economic stagnation. Only a slight growth in the 2 percent range was achieved. This trend is expected to continue throughout 2003. Positive forecasts have been made for 2004, when stricter environmental regulations regarding the use of refrigerants, and increasing focus on energy savings and increasing concerns regarding health and productivity at workspace may be driving growth. These factors require modernization or replacement of old equipment and stimulate the implementation of air conditioning equipment in cars, offices, commercial rooms and even private homes, which considerably increases the sales of car air conditioning systems and split/multi split air conditioning equipment. In general, imports from the United States to Germany are favorable, since there are no quotas or other import restrictions. However, the United States face strong competition from EU countries and the Far East, especially in the mobile air conditioning area.

2001 2002 2003 (e) A) Total market size 8,338 8,504 8,674

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B) Total local production 8,841 9,017 9,197C) Total exports 5,229 5,333 5,439D) Total imports 4,726 4,820 4,916E) Imports from the U.S. 580 590 610 13 Sporting Goods SPT Germany is Europe’s largest sporting goods equipment market and a very sport minded country. There are no fewer than 86,000 clubs, with nearly 26 million members, associated with the "Deutscher Sportbund" (German Sports Federation). It is through the programs of these clubs, rather than school programs as in the USA, that the nation’s elite athletes rise to the top. Excellent opportunities exist for U.S. firms in the German sporting goods market. American sporting goods products, especially those that are “Made in the USA”, continue to set trends and enjoy great popularity in Germany.

2001 2002 2003 (e) A) Total market size 8,200 8,250 8,310B) Total local production 6,250 6,300 6,310C) Total exports 1,650 1,700 1,690D) Total imports 3,600 3,650 3,690E) Imports from the U.S. 670 675 680 14 Travel & Tourism TRA Travel to the United States from Germany is believed to remain stable, mostly due to the strong Euro and exciting packaging and creative promotional activities of German tour operators and U.S. industry partners. In 2002, 1,190,000 Germans visited the United States. Germany ranked third behind the UK and Japan for overseas visitors to the United States in 2002 and for January to April 2003 has surpassed Japan to become the second largest overseas market for visitors to the United States (316,998 visitors from Jan.-Apr. 2003). Bookings from Germany to the United States are down only 2% from 2002 whereas worldwide bookings from Germany were down 16% during the same period. According to the German Travel Barometer, bookings for the second quarter will remain stable and in the third quarter will increase slightly. The strong Euro will continue to positively influence bookings to the United States in 2003 and 2004 as will the planned umbrella marketing campaign funded by the U.S. Department of Commerce’s USD 50 million appropriation to international tourism marketing.

2001 2002 (e) 2003 (e) A) Total sales (expenditure by German tourists abroad) 51,600 50,500 49,400B) Sales by local firms 48,246 47,217 46,189C) Sales by local firms abroad n/a n/a n/aD) Sales by foreign-owned firms 3,354 3,283 3,211E) U.S. expenditure by German tourists 2,965 2,698 2,617 15 Biotechnology BTC Biotechnology is widely seen as the industry that may be the first one to overcome stagnation. The German incubator model of matching private capital with state funding, however, which once put Germany into the “pole-position” for the leading biotech center in Europe, is stalling. While annual sales of the biotech industry worldwide have moderately increased by 2 percent in 2002, sales in Germany have decreased by 3 percent. The number of firms dropped by 2 percent to 360, still representing the largest number in Europe. Germany’s current climate yields a high potential for in-licensing German start-up technology, biotech-to-biotech consolidations and out-licensing to Germany’s big pharmaceutical industry. Product companies in the field of cardio-, cancer- and neuro-therapeutics are expected to perform best on the German market as no German biotech products have yet been introduced. The difficulty in classifying biotech products as such and the plethora of institutions only partially or remotely engaged in biotech work contribute to the difficulty in producing precise statistics for the field. The most accurate figure available for the assessment of the current state of the market is the annual sales.

2001 2002 2003 (e) A) Total sales related to Biotechnology (incl. the estimated sales of

the biotech segments of big pharmaceutical companies) 19,780 21,100 22,490

B) Total sales of German core biotech companies 1,045 1,014 1,020 16 Scientific & Laboratory Instrumentation (S&LI) LAB The market for scientific and laboratory instruments is supported by growth in the pharmaceutical, food processing and biotechnology industries. S&LI usage is rising rapidly in many areas, including pollution monitoring and industrial quality

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control. In addition, private testing laboratories, offering drug analysis, constitute a growing market. On-line analytical instruments are penetrating the traditional process control market, as customers require faster and more accurate data to improve control of product processes for better quality and less waste. Due to the strong export orientation of the industry – 60 percent of the annual production output is exported - the industry depends much on imported technologies preferably from the U.S. With an import market share of 47 percent, the United States is by far the No.1 foreign supplier of S&LI to Germany. Best sales prospects for U.S. suppliers include laser and opto-electronic instrumentation, laboratory automation and information systems (LIMS), and the broad spectrum of chromatographic and spectroscopic technologies. 2001 2002 2003 (e) A) Total market size 3,610 3,826 4,020B) Total local production 4,190 4,570 4,822C) Total exports 2,170 2,300 2,412D) Total imports 1,590 1,530 1,610E) Imports from the U.S. 541 700 710 17 Electronic Industry Production & Test Equipment EIP After a steep downturn over the last 2 years, a recovery of the electronic production and test equipment market is expected for the third quarter of 2003. Compared with 2002, a slight growth rate (1-3 percent) is expected. This growth is expected to be driven by an increase in mobile communications (new device features like integrated cameras increase the sales rate of cell phones), military sector (electronics devices for terror defense), and automotive industry (increasing share of electronics). The growing distribution of flash memory chips is also expected to stimulate the semiconductor business. The test equipment sector is expected to be the focus of large investments as companies try to innovate their way out of the present economic stagnation.

2001 2002 2003 (e) A) Total market size 3,756 3,055 3,116B) Total local production 6,484 5,704 5,818C) Total exports 5,905 5,208 5,312D) Total imports 3,177 2,559 2,610E) Imports from the U.S. 867 585 602 BEST PROSPECTS FOR AGRICULTURAL PRODUCTS (All figures are in metric tons, unless otherwise stated. Exchange rate as of June 26, 2003:: USD 1 = EUR 0.8757) 1: Tree Nuts 2: Pet Food 3: Wine 4: Rice 5: Edible Sunflower Seeds 6: Fishery Products 1 Tree Nuts HTP The category of tree nuts includes pistachios, almonds, pecans, hazelnuts and walnuts. Germany does not produce significant quantities of these nuts; therefore supply is met virtually entirely by imports. Germany is the largest export market for U.S. almonds. A number of U.S. associations actively promote their products in Germany, including the Almond Board of California, California Pistachio Commission and the California Walnut Commission. The leading competitor for the United States in the German tree nut market is Turkey. In 2002, U.S. total exports of tree nuts to Germany were valued at USD 171 million, out of a total import value of USD 519 million.

2001 2002 2003 (e) MT MT MT

A) Total market 170,500 160,300 168,000B) Production * * *C) Total exports 24,500 21,900 20,000D) Total imports 195,000 182,200 188,000E) Imports from the U.S. 58,000 62,400 58,000

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2: Pet Food G&FD Germany is one of the leading countries for pet ownership in the world. Even though the majority of pet foods are produced domestically (the market leader is a U.S. firm), interest in specialty, healthy foods for pets is growing rapidly. German pet owners are willing to pay premiums to properly feed their pets. In 2002, U.S. total exports of pet food to Germany were valued at USD80 million, out of a total import value of USD1.048 billion.

2001 2002 2003 (e) USD million USD million USD million

A) Total market 2,332 2,495 2,750B) Production 2,154 2,324 2,400C) Total exports 818 877 900D) Total imports 996 1,048 1,250E) Imports from the U.S. 62 80 80 3: Wine HTP Germany is the world’s largest importer of wine, with imports totaling 12.6 million hectoliters in 2002, valued at USD 1.71 billion. The import figure represents marginally more than 50 percent of total German wine consumption. Italy, France and Spain are the leading suppliers of wine to Germany, with a combined import market share of nearly 80 percent. U.S. wines together with other ‘new-world’ wines have developed an increasingly good reputation for quality in the German market. In the past five years the value of Germany’s imports of U.S. wines has grown to USD 62.4 million in 2002.

2001 2002 2003 (e) hl hl hl

A) Total market 18,264 19,752 19,400B) Production 8,891 9,885 9,800C) Total exports 2,621 2,705 2,700D) Total imports 11,994 12,572 12,300E) Imports from the U.S. 251 304 300 4: Rice GFD Germany does not produce rice. Thus supply is met exclusively by imports. U.S. shipments of rice to Germany were valued USD 27.9 million in 2002. Market trends indicate that Asian fragrant rice varieties are noticeably gaining market share, which is particularly at the disadvantage of U.S. long grain indica rice shipments to Europe.

2001 2002 2003 (e) MT MT MT

A) Total market 209,921 209,931 210,000B) Production * * *C) Total exports 53,213 60,830 60,000D) Total imports 263,134 270,761 270,000E) Imports from the U.S. 60,376 68,992 70,000 5: Edible Sunflower Seeds for Confectionery Uses COTS Germany is the largest market for U.S. exports of edible sunflower seed, accounting for almost 50 percent of total U.S. exports. While some German farmers continue to grow edible sunflower seed under contract, on the whole, local farmers have not been pleased with crop yields. Marketing efforts on the part of the U.S. National Sunflower Association are expected to assist in the expansion of U.S. exports to this market. In 2002, U.S. total exports of confectionery sunflowers to Germany were valued at USD 29 million, out of a total import value of USD 65 million.

2001 2002 2003 (e) MT MT MT

A) Total market 100,342 125,853 95,800B) Production 5,000 5,000 5,000C) Total exports 4,303 6,530 5,200D) Total imports 99,645 127,383 96,000E) Imports from the U.S. 31,763 35,679 27,000

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6: Fishery Products Fish and fishery products enjoy growing popularity in Germany. The two most important fishery products the U.S. exports to Germany are lobster and frozen Alaska Pollock. Shipments of the latter increased significantly after a major Germany fish processor decided to source only groundfish that was frozen on the trawler directly after catch. In 2002, U.S. total exports of fishery products to Germany were valued at USD140 million, out of a total import value of USD2.2 billion..

2001 2002 2003 (e) MT MT MT

A) Total market 873,765 854,878 865,000B) Production 423,833 410,000 415,000C) Total exports 358,181 342,524 310,000D) Total imports 808,113 787,402 760,000E) Imports from the U.S. 32,152 60,438 55,000 6: TRADE REGULATIONS, CUSTOMS AND STANDARDS OVERVIEW Germany's regulations and bureaucratic procedures can be a difficult hurdle for companies wishing to enter the market, requiring close attention by U.S. exporters. Complex safety standards, not normally discriminatory but sometimes zealously applied, complicate access to the market for many U.S. products. U.S. suppliers are well advised to do their homework thoroughly and make sure they know precisely which standards apply to their product, and that they obtain timely testing and certification. The European Union's (EU) attempts to harmonize the various product safety requirements and related standards for industrial products of its member states, which most manufacturers believe has generally helped open 15 member state markets, did not get entirely rid of voluntary national requirements, a fact which complicates the issue. Theoretically, during a transition period national requirements must be met. (After the transition period, the Europe-wide "CE" mark supersedes all other compliance certificates, provided the products in question are covered by an EU-directive.) The EU's efforts to harmonize standards through the "New Approach" certification-facilitating directives (and separately developed European standards) are incomplete as far as sectors covered. In some cases, U.S. firms, e.g., in the automotive or pharmaceutical sectors, will have to worry about complying with the specific requirements of all applicable "Old Approach" product-specific EU technical legislation. This is doubly important because, to the extent EU-wide standards are developed, there is a high probability that the existing German standard will form the basis for the eventual European standard. In many cases, Germany will also be the first European country to implement EU-wide standards. The implementation of electromagnetic compatibility standards (EMC), despite a five-year phase-in period, surprised many affected companies - not only foreign but also German - with the result that accredited test laboratories are booked for months and market introduction for some products is delayed considerably. German buyers may require additional performance or quality marks, which are not necessarily legally required, but greatly enhance a product's chances to be marketed. Both EU requirements and the standards for a German quality or performance mark will, in many cases, require a product to be modified. Even if the product does not require modification, it will require testing and certification before it can be marketed. Important marks are the "Gepruefte Sicherheit" (GS) mark for mechanical products, and the "Verband Deutscher Elektrotechniker" (VDE) mark for electrical components. It should be emphasized that neither the "GS" license nor the "VDE" license are mandatory for products sold in Germany. The only exception is for products for use in certain work place applications, where either of these marks is required to meet insurance eligibility requirements. The German organization that compiles the standards laying down the requirements for a "GS" mark is the "Deutscher Industrie Normenausschuss - DIN" (German Standards Institute). One of the organizations responsible for testing (in order to obtain the GS and VDE marks) is the "Technischer Ueberwachungsverein e.V. - TUV," (Technical Inspection Association). Although the "VDE" license deals with electrical products, instead of mechanical products, the same process of certification can be followed. A company can obtain "VDE" literature from the VDE publisher (VDE Verlag, GmbH), or directly from the VDE association (for contact information please see below). The process for "VDE" certification is the same as that of the "GS" mark. TUVs are private companies set up by various German states to inspect and test products for compliance with German safety standards. Individual TUVs have also been

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authorized by the German Government to test products for compliance with EU legislation, and many have established representative offices in the United States. Firms interested in certification should contact a U.S.-based test laboratory or a Conformity Assessment Body (see: http://ts.nist.gov/ts/htdocs/210/gsig/emc-cabs-mar02.pdf). Self-Certification For certain products, self-certification by manufacturers (through a Manufacturer’s Declaration of Conformity) is sufficient. Further information is available from the contacts listed at the end of this chapter (see also www.buyusa.gov/europeanunion). Effect Of EU Harmonization On The "GS" And "VDE" Marks: The effect of EU harmonization on the "GS" and "VDE" mark is difficult to analyze. It is estimated that about 75 percent of all American products sold in the EU must have the "CE" mark once all directives have been passed and all transition periods have expired. For products subject to CE marking “CE" mark is mandatory; the mark allows the product to be marketed in all the EU member states. National certificates such as the "GS" and the "VDE" marks, may not be legally required, but enhance marketing chances. German consumers look for these marks in much the same way as Americans look for the "UL" mark. Currently, over 20 of the 22 proposed and planned EU directives have been adopted: low voltage/ electrical safety, toys, simple pressure vessels, construction products, electro-magnetic compatibility, gas appliances, personal protective equipment, machinery, medical devices, non-automatic weighing machines, type approval of telecommunications terminal equipment, medical devices, hot water boilers, lifts and recreational crafts. For products where there is not yet a EU directive, national standards, even if they are voluntary, should be adhered to in order to ensure marketability of a product. Who has the authority to actually affix the "CE" mark? For many products, the mark may be affixed by the manufacturer, based on his or her own testing to verify that the product meets EU requirements. However, EU legislation may require that an independent third party be involved in product assessment. Who is qualified to be this third party? The EU accredits so-called "notified bodies", i.e. testing or certification agencies. In addition to TUV, there are many other notified bodies in Germany. The complete list can be found on: http://europa.eu.int/comm/enterprise/newapproach/legislation/nb/notified-bodies.htm. Contact Information For EU "CE" Standards Certification And Standards: Ms. Suzanne R. Sene, Standards Attache Ms. Sylvia Mohr, Standards Specialist U.S. Mission to the EU (USEU) Commercial Service 27 Blvd. du Regent B-1000 Brussels, Belgium Telephone: [32] [2] 508 2746 Telefax: [32] [2] 513 1228 Mr. Robert Straetz Office of European Union and Regional Affairs Room H-3036 International Trade Administration U.S. Department of Commerce Washington, D.C. 20230 Telephone: (202) 482-4496 Telefax: (202) 482-2155 U.S. Contacts For Foreign Standards Information: Ms. Carmina Londono National Center for Foreign Standards Information National Institute of Standards and Technology TRF Room A163 Gaithersburg, MD 20899 Telephone: (301) 975-4040 Telefax: (301) 975-2128

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American National Standards Institute 1819 L Street NW Washington D.C. 20036 Telephone: (202) 293 8020 Telefax: (202) 293 9287 Value Added Tax/Turnover Tax In common usage, value-added tax (VAT) and turnover tax are regarded as being identical. All imports and deliveries of goods to or in Germany are subject to VAT, as are services deemed to have been rendered within the country. The tax liability rests on the German business providing service or products or on the importer or buyer of goods or services from abroad. The tax levied on the business is invoiced to customers, who may deduct it from their own liability. The ultimate burden is therefore on the final consumer, who, not being a business, does not file VAT claims and therefore has no rights of deduction. The basic VAT rate is 16 percent. A reduced rate of 7 percent is levied on certain specified items, such as food, books and other publications. The full amount of the VAT should be listed separately on invoices. For invoices up to EUR 100 (USD 100) it is sufficient to indicate only the percentage of the tax rate. Invoices amounting to higher sums must list the payable tax separately. In order to fulfill turnover tax liabilities, all revenues must be listed separately on a pre-payment form of the local tax office. It is important, however, to collect and present all invoices as originals in order to deduct the VAT charged from one's own tax liability or to get reimbursed by the German Ministry of Finance. VAT Applicable to Online Sales The European Union’s (EU) fifteen member states have reached unanimous agreement on new rules that are set to change the way that Value Added Tax (VAT) is applied to sales of digital products and services over the Internet. The current system allows U.S.-based suppliers to sell things like down-loadable software to EU final consumers without charging VAT; the proposed changes would require charging VAT. From July 1, 2003, U.S.-based companies selling and delivering services on line to EU customers will have to register for VAT purposes with one Member State. They must collect the tax on all sales at the rate applicable in the consumer’s country, submit quarterly VAT returns, and remit all VAT revenues to the Member State of registration. Custom Regulations/Tariffs Information on customs regulations and tariffs is available from German customs offices, and can differ considerably depending on the products. Please contact the Commercial Service (for contact information, please see Chapter 11). AGRICULTURAL PRODUCTS Beef: For more than ten years, the EU has banned imports of beef from cattle raised with hormonal growth promoters, cutting off U.S. beef exports to the EU. In 1997, a WTO panel found the EU ban on growth promotants to be inconsistent with the principles of the SPS Agreement. Despite this ruling, the EU maintains a ban against these hormones. Although the EU grants market access for annual imports of up to 11,500 MT of beef from the United States and Canada under its high-quality beef (HQB) quota at a duty of 20 percent, very little U.S. beef is shipped to the EU. All beef export from the U.S. to the EU must be from cattle participating in the non-hormone treated cattle program and must be slaughtered in a slaughterhouse that has been approved by the EU in order to meet EU food safety requirements. Poultry: As a result of EU requirements adopted in April 1997, U.S. authorities could not sign export certificates, which would comply with these requirements. U.S. Poultry exports to the EU have been blocked as of that date, representing a loss of $50 million annually to U.S. poultry exporters. The EU continues in its refusal to accept the United States’ antimicrobial treatments in poultry production to prevent transmission of bacteria such as salmonella. For more information on U.S. poultry exports to the EU go to http://www.useu.be/agri/Pltryexp.html Pork: Selected market opportunities exist in Germany for imports of pork. The EU has a tariff-rate quota for pork totaling 66,500 MT, including a 39,000 MT allocation for tenderloins, boneless loins and boneless hams. All pork products must originate in establishments that are approved for export to the EU, and have proper certification that the pork was produced without hormonal growth promotants. Dairy Products: The veterinary agreement allows for the resumption of U.S. dairy product exports to Germany, which had been banned for more than one year. Under the Uruguay Round Agreement, the variable levy on dairy products has been replaced by a fixed tariff equivalent.

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Animal By-Products Legislation: In October 2002, the European Commission approved legislation that will require animal by-products not intended for human consumption, including blood products, hides and pet food, be derived from the carcasses of animals fit for human consumption. This regulation could negatively impact U.S. exports of animal by-products not intended for human consumption to the European Union valued $525 million in CY 2000. The legislation prohibits the use of any rendered protein which was obtained from animal carcasses that were unfit for human consumption as an animal feed ingredient or for pet food. For example, fallen stock will not be permitted in feed. The regulation was scheduled to go into effect on May 1, 2003 but has been delayed. More information is available at http://www.useu.be/agri/by-products.html For more information on the certification of animal products (beef, pork, dairy, embryos and semen) and for a listing of plants which are EU certified go to http://www.useu.be/agri/certification.html Plant Health: Plant health regulations in the fifteen European Union Member States have been harmonized as of June 1, 1993. Phytosanitary certificates, issued by APHIS, have to accompany fruit, vegetable and nut shipments to the EU. For more information go to http://www.useu.be/agri/plantcertif.html Horticultural Products: Germany is an important market for United States horticultural products. Principal products include almonds, grapefruit, raisins, prunes and walnuts. Horticultural products entering Germany face a number of border restrictions. In addition to considerable tariffs that vary by product, imports of selected produce (tomatoes, cucumber, artichokes, zucchini squash, citrus, table grapes, apples, pears, apricots, cherries, peaches, nectarines and plums) are subject to an entry price system. Under such a system, imports that have a price at or above the respective entry price are assessed only the appropriate ad valorem duty. Imports, which have a price below, but within a certain range of the entry price are assessed the ad valorem duty plus a specific duty that is the difference between the import price and the entry price. “Within a certain range” generally means within eight percent of the entry price. Imports having a price more than eight percent below the entry price are assessed the ad valorem duty plus a very large specific duty (known as the tariff equivalent) which generally takes the cost of the product (import price plus duties) far above the entry price. Organic Products: There is a large and growing market within Germany for certified organic products. While organic standards have been set at the EU level, implementation and enforcement of the regulation is the responsibility of the individual member states. This member state responsibility also extends to imports of organic products. In order to import U.S. organic products, EU importers must work through their designated member state authority to obtain an import authorization. These authorizations are granted on a case-by-case basis, subject to the member state's review. More information is available at http://www.useu.be/agri/organic.html Consumer-Ready Products: Changing lifestyles have fueled a sharp rise in the consumption of processed, snack and other consumer-ready foods in Germany. Germany's imports of these products are large, mostly from neighboring EU member countries. However, U.S.-style snack and processed foods are viewed favorably in Germany, particularly by the younger generation and German imports of U.S. processed food products have nearly doubled since the early 1990s. Despite improving access as part of the Uruguay Round, many U.S. agricultural products still face tariff rate quotas and high tariffs entering the EU. Particularly high tariffs are assessed on EU imports from the United States of consumer-oriented products such as animal-based products, fruit and fruit-based products, and processed food products containing added sugar, flour starch or milk. Considerable controversy exists also in Germany (Europe) surrounding the use of bioengineering in the food sector, including whether certain of these products can be marketed in the EU and how they may (or may not) be labeled. For more information please refer to the attaché report on Germany’s retail food sector which is available on the FAS website at http://www.fas.usda.gov/scriptsw/attacherep/default.asp Packaging Disposal: With the tremendous growth of waste and increasing disposal problems, Germany has established legislation, which contains certain rules for the disposal of packaging materials. In response to this legislation, a cooperative effort for the collection and recycling of packaging materials was initiated. The organization involved is called the “Duales System Deutschland,” and it administers the use of the “Green Dot,” a recycling symbol that is found on the packaging material of virtually all products sold in Germany. While packaging materials for products sold in Germany are not legally required to carry the Green Dot, it is almost impossible to market a product in Germany without it. Typically, the importer pays a license fee to the user of the Green Dot, dependent on the type and amount of packaging, and provides the exporter with the information necessary. In 2003, German retailers also implemented a deposit for disposable or "one-way" drink packages, i.e., carbonated drinks and beer cans. Since the requested deposit is about three times as high as that requested for returnable beer bottles, many retailers have either stopped carrying one-way drink packages with deposit or reduced the sales of such products. U.S. Agricultural Commodity Associations Active in Germany

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A number of U.S. agricultural commodity and other trade associations conduct market development programs in Germany. In some cases, these associations maintain staffed field offices in Germany, others may have a trade representative or public

relations company representing their interests, and others may cover Germany from other European offices or from offices in the United States. A portion of the funding for the market development programs of these associations is provided by the USDA-operated Market Access Program (MAP) and Foreign Market Development program (FMD). If you would like more information about the MAP and FMD program or would like to know more about which associations are active in Germany please contact the Office of Agricultural Affairs at the U.S. Embassy in Berlin (see first section for phone, address and e-mail). 7: INVESTMENT CLIMATE STATEMENT Openness to Foreign Investment The German government and industry actively encourage foreign investment in Germany, and German law provides national treatment. Under German law, foreign-owned companies registered in the FRG as a GmbH (limited liability company) or an AG (joint stock company) are treated no differently from German companies. There are no special nationality requirements on directors or shareholders, nor do investors need to register investment intent with any government entity. Foreign companies also generally endure the same or similar investment problems as do domestic firms, such as high marginal income tax rates, inflexible labor laws, and burdensome regulations. The 1956 U.S.-FRG Treaty of Friendship, Commerce and Navigation affords U.S. investors national treatment and provides for the free movement of capital between the U.S. and Germany. Germany subscribes to the OECD Committee on Investment and Multinational Enterprises’ (CIME) National Treatment Instrument and the OECD Code on Capital Movements and Invisible Transactions (CMIT). While Germany’s foreign economic law contains a provision permitting restrictions on private direct investment flows in either direction for reasons of foreign policy, foreign exchange, or national security, no such restrictions have been imposed. In such a case, the federal government would first consult with the Bundesbank and the governments of the federal states. Industrial policy considerations and lobbying by business interests have, however, occasionally delayed decision-making on investment in certain areas. There is no broad authority to screen or block foreign direct investment. Conversion and Transfer Policies As a result of European Economic and Monetary Union (EMU), the Deutsche Mark (DM) was phased out on January 1, 2002 and replaced by the Euro, which is a freely traded currency with no restrictions on transfer or conversion, and which is now the unit of currency in Germany and eleven other EU countries within the monetary union. There is no difficulty in obtaining foreign exchange. There are also no restrictions on inflows and outflows of funds for remittances of profits or other purposes. Expropriation and Compensation German law provides that private property be expropriated for public purposes only, in a non-discriminatory manner, and in accordance with established principles of international law. There is due process and transparency of purpose, and investors and lenders to expropriated entities receive prompt, adequate, and effective compensation. Dispute Settlement Investment disputes concerning American or other foreign investors and Germany are rare, but come up from time to time. Germany is a member of the International Center for the Settlement of Investment Disputes (ICSID), as well as a member of the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. German courts are fully available for foreign investors in the event of investment disputes. The government does not interfere in the court system and accepts binding arbitration. For more information on Germany's law on arbitration, reformed in 1997, see www.internationaladr.com/tc121htm. Performance Requirements/Incentives There are about 3,000 incentive programs for investors in Germany. These programs exist on various levels: EU, federal and state (Land) level. Classifying the various programs by target area helps to clarify them for investors. Target areas include the promotion of investment, research and development, human resource development and the promotion of the European market. Grants, incentive programs, guarantees and loans are available towards this purpose. Cash Grants under the Joint Agreement for the Improvement of Regional Economic Structures (Gemeinschaftsaufgabe GA) – improving the structure of regional economies and the economy as a whole is the main objective of the German federal and state governments. The distribution of these subsidies is generally subject to approval by the European Union. Cash grants approved and paid to investors under the Joint Agreement program from 1999 – 2001 totaled EUR 8.6 billion. The new Joint Agreement program for the period 2002 – 2006 has a provisional budget of EUR 8.1 billion for grants in both Eastern and Western Germany.

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A comprehensive package of federal and state investment incentives is available to domestic and foreign investors. Germany is in compliance with its WTO TRIMS notification. The government has placed particular emphasis on investment promotion in the New States of former East Germany and offered a large number of incentives to this end. Ongoing efforts to reduce government budget deficits and EU efforts to reduce state aid to industry are putting pressure on these programs. Current programs are secured until the end of 2004 and negotiations are currently in progress with the goal of retaining more favorable terms for investments in the New States than will exist in the western states, albeit on lower level than in previous years. Although the access of EU candidate nations will once again put pressure on national and EU programs from 2006 onwards, the government hopes to be able to compensate any subsequent shortfalls in EU investment programs with national programs in the New States. The incentives currently available include: For the eastern German states and eastern Berlin: • Tax Incentives: Investment allowances, special depreciation allowance • Investment Grants: Improvement of Regional Economic Structures Program, grants for research and development,

consulting fee and training costs, export, marketing and fair participation assistance • Credit Programs: Loans with below-market interest rates from the Bank for Reconstruction (KfW) and its offshoot the

Mittelstandsbank, the European Recovery Program (ERP), EU programs and loan guarantee and credit programs. Programs for all of Germany: • Tax Incentives: Special depreciation allowance, capital reserve allowance. • Investment Grants: Improvement of Regional Economic Structures Program, grants for research and development,

consulting fees and training costs. • Credit Programs: Loans with below-market interest rates from the Equalization Funds Bank, Reconstruction Funds Bank,

the European Recovery Program, European Union programs, loan guarantee programs and other programs for small technology firms and environmental demonstration projects.

U.S. and other foreign firms may also participate in government and/or subsidized research and development programs, provided that: -- the company is legally established in Germany; -- the activity is a long-term operation with significant R&D capacities; -- the project engages in sponsored research that is entirely performed in Germany; -- the firm can exploit intellectual property rights independent from a parent company; -- the Federal Ministry of Education, Science, Research and Technology (BMBF) may exploit intellectual property rights from funded research; -- any licensing of technology outside of the EU requires the written approval of BMBF; -- preference is given to locating manufacturing facilities in Germany for any production resulting from the research (this criterion can be modified on a case-by-case basis.) American business representatives generally indicate that these formal requirements and the administration of the programs by German authorities do not constitute barriers for access to this R&D funding. Foreign investors can obtain more information on investment conditions and incentives from: Federal Commissioner for Foreign Investment in Germany Markgrafenstr. 34 10117 Berlin, Germany Telephone: [49][30] 206-570 Telefax: [49][30] 206-571-11 Email: office@fdin.de Internet www.foreign-direct-investment.de www.invest-in-germany.de Federal Commissioner for Foreign Investment in Germany 31 West 52nd Street New York, NY 10019 Telephone: (212) 469-8031 Telefax: (212) 469-2888 Email: ny-office@fdin.de Internet http://www.invest-in-germany.de/

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http://www.foreign-direct-investment.de/ Industrial Investment Council LLC Charlottenstrasse 57 10117 Berlin Telephone: [49][30] 2094-5660 Telefax: [49][30] 2094-5666 Email: karnath@iic.de Internet www.iic.de Industrial Investment Council LLC 230 Park Avenue, Suite 539 New York, NY 10169 Telephone: (212) 983-3660 Telefax: (212) 983-3661 e-mail: newyork@iic.de Right to Private Ownership and Establishment Foreign and domestic entities have the right to establish and own business enterprises, engage in all forms of remunerative activity, and to acquire and dispose of interests in business enterprises. The privatization of state-owned utilities has promoted competition and led to falling prices in some sectors. Following deregulation of the telecommunications sector in 1998, scores of foreign and domestic companies have invested vast sums in that sector. Since then, former state monopolist Deutsche Telekom (DT) has lost more than one third of the long-distance market to competitors, but maintains a 95 percent lock on the "local loop" and 94 percent of DSL broadband connections. The government passed legislation in September 2002 to allow call-by-call and carrier pre-selection in the local loop. Call-by-call was introduced in April 2003, and carrier pre-selection started in July 2003. Foreign investors continue to complain about the continued lack of competition in local telephony (the state owns 43% of DT), which many observers explained in terms of the government's interest in not further harming DT's share price. Some competition also came to the electricity markets in April 1998, and foreign firms have invested in it, though with great difficulty, owing to the high fees to access incumbents’ networks. Natural gas liberalization formally came in August 2000, but competitors have had enormous difficulty gaining access to the incumbents' networks because of cumbersome negotiated access agreements and difficulties in enforcing Cartel Office rulings in a timely manner. Talks on a new negotiated access agreement in the gas sector collapsed in May 2003, and the government has decided in principle to install a regulator for gas and electricity. Over the past year, the positive effects of energy liberalization have largely dissipated, as new entrants have exited the market and prices have begun to creep up. In other sectors, Lufthansa Airlines has also been privatized, but the EU requirement that EU airlines remain majority-owned by EU entities limits the amount of foreign investment. The government also partially privatized Deutsche Post (DP) in November 2000, but the government decided to extend the DP monopoly in letter delivery until 2007. The Cartel Office, which enjoys an excellent international reputation, as well as other regulatory agencies address problems and settle complaints brought forward by foreign market entrants and bidders. Protection of Property Rights The German Government adheres to a policy of national treatment, which considers property owned by foreigners as fully protected under German law. There is almost no discrimination against foreign investment and foreign acquisition, ownership, control or disposal of property or equity interests, with airline ownership being an exception. In Germany, the concept of mortgages is subject to a recognized and reliable security. Secured interests in property, both chattel and real, are recognized and enforced. Intellectual property is well protected in Germany. Germany is a member of the World Intellectual Property Organization (WIPO). Germany is also a party to the major international intellectual property protection agreements: the Bern Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, the Universal Copyright Convention, the Geneva Phonograms Convention, the Patent Cooperation Treaty, the Brussels Satellite Convention, and the Treaty of Rome on Neighboring Rights.

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U.S. citizens and firms are generally entitled to national treatment in Germany with only a few exceptions. The federal government’s commitment under the intellectual property rights portion (TRIPS) of the GATT Uruguay Round has further reduced concerns about the level of software piracy. National treatment is also granted to foreign copyright holders, including remuneration for private recordings. Under the TRIPS agreement, the federal government also grants legal protection for practicing U.S. artists against the commercial distribution of unauthorized live recordings in Germany. Foreign and German rights holders have criticized several exceptions to copyright protections in the new Copyright Act, which passed the Parliament in July 2003. Transparency of the Regulatory System Germany has transparent and effective laws and policies to promote competition, including anti-trust laws. Recently restrictions to stores holding sales and store opening hours, which had been questioned by some business for actually limiting competition, have been eliminated or relaxed. The German economy is highly regulated, with authority dispersed over the federal, state, and local levels. Many investors consider bureaucracy excessive, which has prompted most state governments to establish investment promotion offices and investment banks to expedite the process. New rules have simplified bureaucratic requirements, but industry must sometimes contend with officials’ relative inexperience with deregulation and lingering pro-regulation attitudes. Taxation of American firms within the FRG is governed by the 1989 “Convention for the Avoidance of Double Taxation with Respect to Taxes on Income.” It has been in effect since 1989 (and since January 1, 1991 for the area that comprised the former German Democratic Republic.) With respect to income taxes, both countries agree to grant credit to their respective federal income taxes for taxes paid on profits by enterprises located in each other’s territory. The German system is more complex, but there are more similarities than differences between the German and American business tax systems. American companies can, with effort, generally obtain the resident and spouse work permit visas they need to do business in Germany, but the relevant laws are quite broad and considerable administrative discretion is exercised in their application. A number of U.S. states have not yet concluded reciprocal recognition of driver’s licenses agreements with the German government. Licenses from those states are not usable in Germany. Efficient Capital Markets and Portfolio Investment Germany has a modern financial market sector but is often considered “over-banked” as evidenced by on-going consolidation and low profit margins. Over the last few years, the banking system has suffered from losses and high costs, giving rise to some concerns. On the other hand, in the framework of the IMF’s assessment of the German financial sector in spring 2003, so-called stress tests found that the system is robust. In order to improve their situation, particularly the large private banks launched massive cost cutting programs. Consolidation of the sector is continuing mainly through mergers in the public banking sector. At the end of 2002, the total assets of 2,365 domestic banks were EUR 6.45 trillion. The 274 reporting commercial banks accounted for 1.8 trillion Euro of this amount. The four largest commercial banks (Deutsche Bank, HVB, Dresdner Bank, and Commerzbank) accounted for nearly 58 percent of total commercial bank assets. Credit is available at market-determined rates to both domestic and foreign investors and a variety of credit instruments are available. Legal, regulatory and accounting systems are generally transparent and consistent with international banking norms. Germany has a universal banking system that is effectively regulated by federal authorities. Given the economic downswing, over the last few years, mergers and acquisitions (M&A) have basically decreased in line with global trends. Recently, this development has been even more negative in Germany than elsewhere. However, experts expect that M&A transactions will take up again in the foreseeable future. In anticipation of this increase, the government introduced legislation to establish an orderly and transparent process for takeovers, while at the same time strengthening protective mechanisms to ward off hostile takeovers. A new proposal for a EU Takeover Directive published in October 2002 was opposed by the German government and by several other member states. The directive would harmonize rules on takeovers, force managers to consult their shareholders in the event of a hostile takeover, and could increase competitiveness. German opponents of the Directive argued that special voting rights enjoyed in some EU countries would have created an uneven playing field and exposed German companies to relatively greater risk of hostile takeover since such special voting rights generally are no longer available in Germany.

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In recent years, Germany has also implemented a series of laws to improve its securities trading system, including insider-trading laws and the Fourth Financial Market Promotion Law in 2003. In 2002, a corporate governance code was adopted, which, while voluntary, requires listed companies to "comply or explain" why the code or parts thereof have not been

followed. The code is intended to increase transparency and improve management response to shareholder concerns. Stimulating a number of other changes in its regulatory framework is the EU's Financial Services Action Plan -- an effort intended to create a more integrated European financial market by 2005. In addition, the Finance and Justice Ministries have announced a 10 Point Plan to improve investor protection, including by strengthening provisions regarding (a) the liability of boards of directors for false or misleading statements; and (b) oversight of auditing operations. Political Violence Political acts of violence against either foreign or domestic business enterprises are extremely rare. Isolated cases of violence directed at certain ethnic minorities and asylum seekers have not affected U.S. investments or investors. Corruption Among the industrialized nations, Germany ranks in the middle of the field, according to Transparency International’s corruption indices. The construction sector and public contracting in conjunction with undue political party influence represent particular areas of continued concern. Strict anti-corruption laws apply to domestic economic activity. U.S. firms have not identified corruption as an impediment to investment. The German government has sought to reduce domestic and foreign corruption. For example, Germany in February 1999 ratified the 1998 OECD Anti-Bribery Convention, thereby criminalizing bribery of foreign public officials by German citizens and firms abroad. Tax reform legislation that became law in March 1999 ended the tax write-off of bribes in Germany and abroad. Germany has increased penalties for bribery of German officials, for corrupt practices between companies, and for price-fixing by companies competing for public contracts. It has also strengthened anti-corruption provisions applying to support extended by the official export credit agency and tightened the rules for public tenders. Most state governments have contact points for whistle blowing and provisions for rotating personnel in areas prone to corruption. Government officials are forbidden from accepting gifts linked to their jobs. Opinions, however, differ on the effect these steps will have in practice. German industry opposes creation of a central, national-level register of corrupt companies that would be barred from bidding for public contracts. Draft legislation to create such a register failed passage last year in parliament. Nevertheless, some individual states maintain their own registers and the legislation will likely be reintroduced on the federal level. The German government has successfully prosecuted hundreds of domestic corruption cases over the years; numbers have risen significantly in the last two years. However, there have been no prosecutions involving the bribery of foreign government officials since the 1999 changes in German law. Bilateral Investment Treaties Germany has treaties in force with 119 countries and territories. Of these, eight are covered by treaties with predecessor states (Czechoslovak SFR, Soviet Union, Yugoslavia [SFRY]). These are: Albania; Algeria; Antigua and Barbuda; Argentina; Armenia; Azerbaijan, Bangladesh; Barbados; Belarus; Benin; Bolivia; Bosnia and Herzegovina*; Bulgaria; Burundi; Cambodia; Cameroon; Cape Verde; Central African Republic; Chad; Chile; China; Congo (Republic); Congo (Democratic Republic); Costa Rica; Croatia; Cuba; Czech Republic*; Dominica; Ecuador; Egypt; El Salvador; Estonia; Gabon; Georgia; Ghana; Greece; Guinea; Guyana; Haiti; Honduras; Hong Kong; Hungary; India; Indonesia; Iran; Ivory Coast; Jamaica; Jordan; Kazakhstan; Kenya; Republic of Korea; Kuwait; Kyrgyzstan*; Laos; Latvia; Lebanon; Lesotho; Liberia; Lithuania; Macedonia; Madagascar; Malaysia; Mali; Malta; Mauritania; Mauritius; Mexico; Moldova*; Mongolia; Morocco; Namibia; Nepal; Nicaragua; Niger; Oman; Pakistan; Panama; Papua New Guinea; Paraguay; Peru; Philippines; Poland; Portugal; Qatar; Romania; Russia*; Rwanda; Saudi Arabia; Senegal; Sierra Leone; Singapore; Slovak Republic*; Slovenia; Somalia; South Africa; Sri Lanka; St. Lucia; St. Vincent and the Grenadines; Serbia and Montenegro*; Sudan; Swaziland; Syria; Tajikistan*; Tanzania; Thailand; Togo; Tunisia; Turkey; Turkmenistan; Uganda; Ukraine; United Arab Emirates; Uruguay; Uzbekistan; Venezuela; Vietnam; Yemen (Arab. Rep.); Zambia; and Zimbabwe. (Note: Asterisk denotes treaty in force with predecessor state.) Germany has ratified treaties, which are not yet in force, with the following countries: Country Signed Temporarily Applicable Botswana 05/23/00 No Brazil 09/21/95 No Burkina Faso 10/22/96 Yes Gabon (new treaty) 09/15/98 * Israel 06/24/76 Yes Moldova 02/28/94 * Sri Lanka (new treaty) 02/07/00 *

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Germany has signed, but not yet ratified, treaties with the following 11 countries/territories. These include new treaties signed with some of the countries of the former Soviet Union and former Yugoslavia, which also remain listed above as prior treaties with these entities remain in effect. Country Signed Temporarily Applicable Bosnia and Herzegovina 10/18/01 No Brunei 03/30/98 No Kyrgyzstan 08/28/97 * Iran (new treaty) 08/17/02 * Morocco (new treaty) 08/06/01 * Mozambique 03/06/02 * Nigeria 03/28/00 No Palestine 07/10/00 No Tadghikistan 03/27/03 * Thailand (new treaty) 06/24/03 * (*) Previous treaties apply OPIC and other Investment Programs OPIC programs were available for the New States of eastern Germany following reunification for several years during the early 1990s, but were suspended following the extraordinary achievements in the economic and political transition. Labor The German labor force is generally highly skilled, well educated, disciplined, and very productive. However, the labor market is characterized by various structural problems, German wages and fringe benefits are among the highest in the world, and, partly as a result, unemployment is high (9.7 %, according to national calculation methods, 8.2% by OECD standards). Although sector-wide labor agreements can set wages at high levels in some industries, there are possibilities for company-level agreements, which can significantly attenuate these high levels. Meanwhile, generous unemployment benefits reduce the incentive to take those lower paying jobs that are available. Legislation designed to protect workers can limit the ability of employers to adapt to changing market conditions. The government has pending legislation to reform certain labor laws, healthcare rules, and the pension system. The goal is to enact these reforms by the end of 2003, but the government’s success is not assured. The overriding goal of these reforms is to reduce labor costs for employers. The reforms in the healthcare and pension systems also seek to limit impending sharp increases in public spending as the post-World War II baby boom generation ages and retires. The country's system of combined on-the-job and academic training for apprentices produces many of the skills employers need. While widely supported in Germany, there are criticisms of the dual training system. Employers object to its “rigidities” – in principle, protective rules such as restrictions on night work. Another criticism is that the system is too inflexible with regard to occupational categories and training standards; re-training skilled workers for new skills is also extremely difficult. The labor unions complain that employers do not establish enough training slots and do not hire enough of the trainees after their training is completed. The problem of too few slots was documented again in 2003. Despite overall high unemployment, a serious labor shortage has appeared in some high-tech sectors, prompting business calls for easier visa procedures for qualified foreign guest workers, especially in the information technology field. The government has responded with a program to attract more foreign IT specialists. There have been reports that the continuing economic slackness has caused some of these workers to lose their jobs. Unionized labor (28-30 % percent of the labor force) is organized in eight unions largely grouped by industry or service sector. These unions are affiliates of the German Trade Union Federation (DGB). Unions’ right to strike and the employers’ right to lockout are protected in the German constitution. Court rulings over the years have limited management recourse to lockouts, however. Labor has traditionally been able to agree with management with relatively few work stoppages (in the second quarter of 2002 about 0.1 hours of work lost per worker). Works councils are bodies consisting of worker and management representatives which workers in companies with five or more permanent workers or more can choose to elect. The rights of the works council cover the right to be informed,

26

consulted, and to participate in company decisions. Works councils often help labor and management settle problems before they become disputes and disrupt work. A reform in the law governing the works councils enacted in 2001 accelerated the procedures to establish works councils and strengthened their consultation and participation rights. "Co-determination" laws give the workforce in medium-sized or large companies (stock corporations, limited liability companies, partnerships limited by shares, co-operatives or mutual insurance companies) significant voting representation on the firms’ supervisory boards. This codetermination in the supervisory board extends to all company activities. Foreign-Trade Zones/Free Ports There are two free ports in Germany, one in the Hamburg harbor and the other in Duisburg. These duty-free ports also permit value-added processing and manufacturing, albeit under certain requirements, and both are open to both domestic and foreign entities. Foreign Direct Investment Statistics There are a number of sources of statistics on the origin and magnitude of foreign investment, employing varying methods and definitions. According to the U.S. Department of Commerce, the cumulative volume (direct investment position on a historical-cost basis) of American investment in Germany as of 1994, about $39 billion, was roughly equal to that of German investment in the United States. Thereafter, however, annual flows of new German investment into the United States exceeded flows of American investment into Germany. As a result, by 2000, the cumulative position of German investment in the United States reached $123 billion, having more than doubled since 1995, while U.S. investment in Germany was valued at just under $54 billion. According to German statistics, in 2002 Germany saw a gain of new investment from the U.S. of EUR 1 billion while it invested EUR 49.2 billion in the U.S. in the same period, resulting in a net investment flow to the U.S. of EUR 43.7 billion In general, the latest statistics issued by the German Bundesbank (central bank) show that German investment abroad has tended in recent years to exceed foreign investment received, with 2000 being an exception due to large, one-off investments in the telecommunications sector. From a peak of over EUR 100 billion in 1999, German direct investment abroad has fallen over the last three years -- standing at EUR 47.0 billion in 2001 and 26.0 billion in 2002. Meanwhile, in the same period foreign direct investment in Germany rose, after a decline to EUR 37.9 billion in 2001, to EUR 40.4 billion in 2002 -- for a net direct investment inflow of EUR 14.4 billion. In 2002, Germany's financial account (which includes direct-, and portfolio investments) showed EUR 48.9 billion in net capital imports – after net capital exports of EUR 22.2 billion in 1999 and EUR 28.5 billion in 2000. The trend was reversed in 2001 with EUR 1.0 billion of net capital imports. Table 3. Germany’s International Investment Position (EUR billion) Calendar Year 2000 2001 2002 Net Direct Investment By German Nationals/Entities Abroad

61.7

47.0

26.0

Net Direct Foreign Investment In Germany

220.4

37.9

40.4

(Source: Deutsche Bundesbank.) Table 4. Foreign Direct Investment in Germany by Sector (2002 – EUR million) Holding Companies 23,012Chemical industry 4,770Data handling 2,151Services 1,821Credit and banking 1,453Media 1,312Automobiles and parts 896Electric power equipment, distribution 646Insurance 549Medical-, Measuring-, Guidance-, Handling- equipment, Optics 439Rubber and plastic 121Machine tools 67

27 (Source: Deutsche Bundesbank; figures omit reinvested earnings)

Table 5. Top 20 U.S. investors in Germany in 2000 (in rank order): 1. Opel AG 11. Conoco Mineraloel GmbH 2. Ford-Werke AG 12. Mobil Oil AG 3. Esso Deutschland AG 13. Dow Deutschland, Inc. 4. Phillip Morris GmbH 14. Kraft Jacobs Suchard Erzeugnisse GmbH 5. IBM Deutschland GmbH 15. Motorola Deutschland 6. General Electric Deutschland 16. Deere and Company European Office 7. Hewlett-Packard GmbH 17. Du Pont de Nemours (Deutschland) GmbH 8. German Coca-Cola 18. Delphi Automotive Systems GmbH 9. Procter and Gamble 19. Compaq Computer GmbH 10. ITT Industries Europe GmbH 20. Kodak AG 8: TRADE AND PROJECT FINANCING Germany has a basically non-discriminatory, well-developed financial services infrastructure. Germany's universal banking system allows the country's more than 38,000 bank offices not only to take deposits and make loans to customers, but also to trade in securities. The traditional German system of cross-shareholding among banks and industry, as well as a high rate of bank borrowing relative to equity financing, have allowed German banks to exert substantial influence on industry in the past. Germany’s recent tax reform, however, eliminated the capital gains tax on holdings sold by one corporation to another as of January 2002. This change is considered especially important to promote industrial restructuring, unwind Germany’s complex web of interlocking corporate ownership, and rationalize capital allocation, even though the currently low stock prices seem to slow down that process. Private banks control 28 percent of the market, while publicly owned savings banks and Landesbanken controlled by state and local governments account for 36 percent of banks’ volume of business, and cooperative banks make up the balance. All three types of banks offer essentially the same, full range of services to their customers. An array of specialist banks finance homeowner mortgages, provide guarantees to small and medium-sized businesses, finance projects in disadvantaged regions in Germany and guarantee exports to developing countries. Practices regarding finance, availability of capital and schedules of payment are comparable to those that prevail in the United States. There are no restrictions or barriers on the movement of capital, foreign exchange earnings or dividends. Virtually all major U.S. banks are represented in the German market principally, but not exclusively, in the city of Frankfurt am Main, Germany's main financial center. A large number of German banks, including some of the partially state-owned regional banks, similarly maintain subsidiaries, branches and/or representative offices in the United States. Germany's largest private banks are Deutsche Bank, HVB, Commerzbank, and Dresdner Bank. 9: BUSINESS TRAVEL Neither Germany's legal system nor its fully developed infrastructure present any obstacles for traveling to the country. Travel by plane, train or car meets international standards, but prices exceed U.S. standards. The number of in-country flights has been picking up and the train stations that dot the country provide sufficient access to nearly all cities. Nevertheless, cars are the most popular means of transport and Germany's famous highway system is extensive. The condition of roads in eastern Germany may still not reach western German standards, but they are not barriers to traveling. Geographic distances are relatively short, when compared to the United States, but as Germany is much more densely populated than its European neighbors, it may take a little longer to travel the same distance in the FRG than it may take in France or Scandinavia. The industrial and commercial centers in the Rhine-Main (Frankfurt) and Rhine-Ruhr areas are densely populated and heavily industrialized, and business travelers are well advised to plan on early departures to reach their destination on time. Train and air travel are also efficient means of travel, with timely and comprehensive connections between all major and many minor cities throughout both eastern and western Germany. There is sufficient hotel space in most major cities, unless there happens to be a major trade fair or a similar event in a particular city. Business class amenities and services can be found in all major cities, including those in the eastern states.

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Visas are not required for U.S. passport holders on business (and leisure) travel spending fewer than 90 days in Germany. For longer stays, travelers are encouraged to apply to the German Embassy or German Consulates in advance of travel (see addresses in Appendix E, part VII). Please note new regulations for German citizens entering the United States. Starting October 1, 2003, Germans must have a machine-readable passport in order to travel to the U.S. without a visa. In order to avoid the inconvenience and expense of applying in person for a U.S. visa, please advise your German business partners who travel to the U.S. that all travelers, including infants and children, will need to have individual, machine-readable "Europapass"-style passports. Holders of green-cover non-readable German passports and children's travel documents (Kinderausweise) will no longer be eligible for visa-free travel. Please advise your German business partners to make advance preparations in order not to delay their business travel to the United States. Further information on the Visa Waiver Program requirements can be found at the Department of State's Visa Services web site, http://travel.state.gov/vwp.html.

Travel Guides for Business Representatives are available for sale by the Superintendent of Documents. U.S. Government Printing Office, Washington, D.C. 20402; phone: (202) 512-1800; fax: (202) 512-2250. Business travelers to Germany seeking appointments with U.S. Mission officials should contact the commercial sections of the Embassy or the Consulates General in advance. [For contact information, please see Section 11. U.S. and Country Contacts.] Table 6: Germany-wide holidays in FY 2004: Date Holiday October 3, 2003 Day of German Unity October 31 Reformation Day (4,9,13,14,16) November 1 All Saints Day (1,2,10,11,12) November 19 Repentance Day (13) December 25 Christmas December 26 Second Christmas Day January 1, 2004 New Years Day January 6 Epiphany (1,2,14) April 9 Good Friday April 12 Easter Monday May 1 German Labor Day May 20 Ascension Day May 31 Whit Monday June 10 Corpus Christi Day (1,2,7,10,11,12,13,16)August 15 Assumption Day (2,13)

The above numbers denote that the respective holidays are observed in the following federal states: 1 = Baden-Wuerttemberg 2 = Bavaria 3 = Berlin 4 = Brandenburg 5 = Bremen 6 = Hamburg 7 = Hesse 8 = Lower Saxony 9 = Mecklenburg-Pommerania 10 = Northrhine-Westphalia 11 = Rhineland-Palatinate 12 = Saarland 13 = Saxony 14 = Saxony-Anhalt

29

15 = Schleswig-Holstein 16 = Thuringia 10: ECONOMIC AND TRADE STATISTICS A. OVERVIEW

a. Population: 83 million (2000), including 17.2 million in eastern Germany and 7.4 million foreigners (d). b. Religion: 34% Protestant, 33% Catholic. c. Government: Constitutional, parliamentary confederation Head of State: Johannes Rau, President Head of Government, Gerhard Schroeder, Chancellor d. Language: German

B. DOMESTIC ECONOMY

1999

2000

2001

2002

Source /Endnote

GDP (current, EUR bill) 1,978.6 2,030.0 2,071.2 2,108.2 (a)GDP (current, $ bill) 2,111.2 1,875.7 1,855.8 1,990.1 (a)Real GDP Growth Rate (%) +2.0 +2.9 +0.6 +0.2 (a)GDP per Capita ($) 25,714.7 24,699.1 22,534.4 24,109.7 (a)Fed Govt Expenditure(% GDP) 13.9 13.5 13.1 13.7 (1)(a)Public Expenditure(% GDP) 49.5 48.6 49.1 49.8 (1)(a)Inflation/Cost of Living (%) 0.6 1.4 2.0 1.4 (c)ForEx Reserves (EUR bill) 93.0 93.8 93.2 85.0 (a)Unemployment (%) 10.5 9.7 9.4 9.8 (a)Exchange Rate ($/EUR) 1.067 0.924 0.896 0.944 (d)Ext'l Public Debt ($ bill) 442.3 407.1 405.9 475.9 (a)Wages (1995=100) 109.2 111.4 113.6 116.6 (a)Productivity (Output per hour, 1995=100) 107.3 109.6 110.7 n/a (a)

C. TRADE

1999 2000 2001 2002 Source a) Total exports (fob/USD billion) 544.2 552.0 571.9 612.0 (a)b) Total imports (cif/USD billion) 502.1 438.1 445.5 459.2 (a)c) Imports from U.S. (fas/USD billion) 26.8 29.5 30.0 26.6 (b)d) Exports to U.S. (customs/USD billion) 57.0 60.3 59.0 62.5 (b)e) Principal U.S. exports: computers & software, computer services, drugs and pharmaceuticals, medical equipment f) Principal U.S. imports: motor vehicles/parts, machine tools, machinery, analytical/diagnostic equipment, chemicals.

g) Foreign supplier imports (%): share of German import Market

France NetherlaItaly United SUnited KBelgium/LuxemboJapan China

1999 2000 2001 2002 Source 10.2 9.4 9.5 9.9 (c)

nds 8.1 8.3 8.5 8.5 (c) 7.4 6.6 6.6 6.5 (c)

tates 8.3 8.8 8.4 7.6 (c)ingdom 6.9 6.9 7.0 6.3 (c) urg

4.9 5.6 5.1 5.1 (c)

4.9 5.0 4.2 3.6 (c) n/a n/a n/a 4.1 (a)

30

h) Current account (EUR billion): i) Trade balance with world & leading trading partners (USD billion)

j) Import policy 1. Tariffs: EC Common External Tariff.

2. Taxes: Value Added Tax (VAT) of 16% on in 3. Licensing: Few restrictions.

k) Best U.S. Export Prospects: Computer Software, CPeripherals, Medical Equipment, Industrial ChemicalsParts and Services, Telecommunications Equipment,Equipment, Travel and Tourism,

199Austria United Kingdom France United States Belgium/Luxembourg Italy Netherlands Japan ** World **

SOURCES: a. German Federal Bank Monthly Reports and b. Official statistics of the U.S. Department of C c. German Federal Statistical Office d. International Monetary Fund 11: U.S. AND COUNTRY CONTACTS

A. COUNTRY CONTACTS Federal Ministry of Economics Bundesministerium fuer Wirtschaft & TechnologieMr. Wolfgang Hantke, America Desk Officer Scharnhorststrasse 34-37 10115 Berlin, Germany Telephone: [49][30] 2014-7578 and 01888-615Telefax: [49][30] 2014-5479 and 01888-615Email: info@bmwi.bund.de www.bmwi.de Bundesministerium fuer Wirtschaft & TechnologieDr. Bernard Veltrup, Head of Division - New StateScharnhorststrasse 34-37 10115 Berlin, Germany Telephone: [49][30] 2014-6260 Telefax: [49][30] 2014-5364 Email: info@bmwi.bund.de www.bmwi.de

Federal Bureau for Foreign Trade Information Bundesagentur fuer Aussenwirtschaft Ms. Zimniok, North American Desk Officer Agrippastrasse 87-93

1999 2000 2001 2002 Source -22.3 -28.5 +0.8 +48.9 (a)

dustrial goods.

omputer Services, Management Consulting Services, Computers and , Drugs and Pharmaceuticals, Franchising, Sporting Goods, Automotive Industrial Process Controls, Electronic Components, Pollution Control

9 2000 2001 2002 Source 10.7 11.0 10.6 11.4 (a)13.2 11.5 13.5 19.5 (a)13.9 15.3 17.0 19.3 (a)15.6 13.5 19.6 25.1 (a)6.3 6.0 6.0 5.0 (a)5.6 8.5 10.6 13.0 (a)

-1.8 -5.3 -2.9 -3.4 (a)-12.2 -12.6 -8.5 -6.5 (a)69.5 54.6 84.4 126.2 (a)

supplements ommerce

-7578 -5479

s

31

50676 Koeln, Germany Telephone: [49][221] 20 57-249 Telefax: [49][221] 20 57-212 www.bfai.de Federal Ministry of Finance Bundesministerium fuer Finanzen Wilhelmstrasse 97 10117 Berlin, Germany Telephone: [49][30] 2242-0 Telefax: [49][30] 2242-3260 www.bundesfinanzministerium.de

B. COUNTRY TRADE ASSOCIATIONS/CHAMBERS OF COMMERCE Bundesverband der Deutschen Industrie e.V. (BDI) (Federation of German Industries) Breite Strasse 29 10178 Berlin, Germany Telephone: [49][30] 2028-0 www.bdi-online.de Deutscher Industrie und Handelskammertag (DIHK) (Federation of German Chambers of Industry and Commerce) Breite Strasse 29 10178 Berlin, Germany Telephone: [49][30] 203 08-0 Telefax: [49][30] 203 08-1000 Email: dihk@berlin.dihk.de www.diht.de

Bundesverband des Deutschen Gross- und Aussenhandels e.V. (BGA) (Federation of German Wholesale and Foreign Trade) Am Weidendamm 1 A 10117 Berlin, Germany Telephone: [49][30] 5900 995-0 Telefax: [49][30] 5900 995-19 www.bga.de Zentralverband Elektrotechnik- und Eletronikindustrie e.V. (ZVEI) (German Electrical and Electronic Manufacturers Association) Stresemannallee 19 60596 Frankfurt/Main, Germany Telephone: [49][69] 6302-0 Telefax: [49][69] 6302-317 Email: zvei@zvei.org www.zvei.de Verband Deutscher Maschinen- und Anlagenbau e.V. (VDMA) (German Association of Machinery and Plant Manufacturers) Lyoner Strasse 18 60528 Frankfurt/Main, Germany Telephone: [49][69] 6603-0 Telefax: [49][69] 6603-1511 Email: puoe@vdma.org www.vdma.de

32

Bundesverband Informationswirtschaft, Telekommunikation und Neue Medien e.V. (BITKOM) (Federal Association for IT, Telecommunications and New Media Companies) Albrechtstraße 10 10117 Berlin Postfach 640144 10047 Berlin Telephone: [49][30] 2 75 76-0 Telefax: [49][30] 2 75 76-4 00 Email: bitkom@bitkom.org

Centralvereinigung Deutscher Handelsvertreter- und Handelsmakler-Verbaende (CDH)

(General Association of Commercial Agents and Brokers) Am Weidendamm 1a 10117 Berlin, Germany Telephone: [49][30] 72625-600 Telefax: [49][30] 72625-699 Email: centralvereinigung@cdh.de www.cdh.de

American Chamber of Commerce Rossmarkt 12 60311 Frankfurt am Main Telephone: [49][69] 92 91 04 - 0 Telefax: [49][69] 92 91 04 - 11 Email: info@amcham.de www.amcham.de

C. COUNTRY MARKET RESEARCH FIRMS It would exceed the scope of this guide to list even only the major market research or consultant companies. Most of these firms belong to one or both of the following associations and can be contacted through these.

Bundesverband Deutscher Unternehmensberater e.V. (BDU) (Federal Association of German Consultants) Mr. Christoph Weyrather Zitelmannstr. 22 53113 Bonn, Germany Telephone: [49][228] 9161-0 Telefax: [49][228] 9161-26 Email: info@bdu.de www.bdu.de Arbeitskreis Deutscher Markt- und Sozialforschungsinstitute e.V. (ADM) (Federation of German Market and Social Research Institutes) Dr. Klaus L. Wuebbenhorst, Member of the Board Langer Weg 18 60489 Frankfurt/Main, Germany Telephone: [49][69] 97843136 Telefax: [49][69] 97843137 Email: adm.ev@t-online.de www.adm-ev.de

D. COUNTRY COMMERCIAL BANKS There are numerous domestic and foreign banks represented in Germany; among the largest German and American institutions are:

33

Deutsche Bank AG Taunusanlage 12 60325 Frankfurt am Main, Germany Telephone: [49] [69] 91 000 Telefax: [49] [69] 910-34227 Email: deutsche-bank@db.com

www.deutsche-bank.de

Dresdner Bank AG Juergen-Ponto-Platz 1 60301 Frankfurt am Main, Germany Telephone: [49] [69] 263-0 Telefax: [49] [69] 263-4004

www.dresdner-bank.com

Westdeutsche Landesbank Herzogstrasse 15 40217 Dusseldorf, Germany Telephone: [49] [211] 826-01 Telefax: [49] [211] 826-6119

www.westlb.de Commerzbank AG Neue Mainzer Strasse 32-36 60311 Frankfurt am Main, Germany Telephone: [49] [69] 1362-0 Telefax: [49] [69] 136-41665 Email: info@commerzbank.com

www.commerzbank.com

Citibank AG Reutterweg16 60323 Frankfurt am Main, Germany Telephone: [49] [69] 1366-0 Telefax: [49] [69] 1366-1113

www.citibank.com JP Morgan GmbH Boersenstr. 2-4 60313 Frankfurt am Main, Germany Telephone: [49] [69] 7124-0 Telefax: [49] [69] 7124-1306

www.jpmorgan.com Goldman-Sachs & CO OHG Messeturm Friedrich-Ebert-Anlage 49 60308 Frankfurt am Main, Germany Telephone: [49] [69] 7532-0 Telefax: [49] [69] 7532-2800

www.gs.com

Merrill Lynch Bank AG Neue Mainzer Strasse 52 60311 Frankfurt am Main, Germany Telephone: [49] [69] 5899-0 Telefax: [49] [69] 5899-4000

34

www.ml.com

E. U.S. EMBASSY TRADE PERSONNEL

United States Embassy, Berlin, Germany Mailing Address: U.S. Embassy Berlin PSC 120, Box 1000 APO AE 09265 Street Address: U.S. Embassy Berlin Neustaedtische Kirchstrasse 4-5 10117 Berlin Telephone: [49] [30] 238-5174 (Switchboard) Telefax: [49] [30] 2045-4466 www.usembassy.de Ambassador Daniel R. Coats Deputy Chief of Mission Mr. John Cloud Minister Counselor for Commercial Affairs Mr. John Fogarasi Telephone: [49][30] 8305 2740 Telefax: [49][30] 2045 4466 Email: john.fogarasi@mail.doc.gov Minister Counselor for Economic Affairs Mr. Robert Cekuta Telephone: [49][30] 8305 2305 Telefax: [49][30] 204 4457 Email: nelsondd@state.gov Minister-Counselor for Agricultural Affairs Mr. Richard K. Petges Telephone: [49][30] 8305 1150 Telefax: [49][30] 8431 1935 Email: Petges@fas.usda.gov U.S. Representative to the U.S. Central Bank Mr. James G. Wallar U.S. Consulate General Frankfurt Siesmayerstrasse 21 60323 Frankfurt Telephone: [49][69] 7535 2459 U.S. Consulates Dusseldorf U.S. & Foreign Commercial Service

35

Mr. Edward Fantasia, Commercial Representative Willi-Becker-Allee 10 40227 Dusseldorf, Germany Telephone: [49][211] 737-767-0 Telefax: [49][211] 737-767-67 Email: dusseldorf.office.box@mail.doc.gov http://www.buyusa.gov/germany/en/duesseldorf.html Frankfurt/Main U.S. & Foreign Commercial Service Mr. Todd Thurwachter, Commercial Officer Siesmayerstrasse 21 60323 Frankfurt/Main, Germany Telephone: [49][69] 956204-0 Telefax: [49][69] 561114 Email: frankfurt.office.box@mail.doc.gov http://www.buyusa.gov/germany/en/frankfurt.html Hamburg U.S. & Foreign Commercial Service Mr. James Finlay, Commercial Representative Alsterufer 27/28 20354 Hamburg, Germany Telephone: [49][40] 4117 1224 Telefax: [49][40] 4106 598 Email: hamburg.office.box@mail.doc.gov http://www.buyusa.gov/germany/en/hamburg.html Leipzig U.S. & Foreign Commercial Service Mr. Andrew Wylegala, Commercial Officer (resident in Berlin) Wilhelm-Seyfferth-Strasse 4 04107 Leipzig, Germany Telephone: [49][341] 2138 440 Telefax: [49][341] 2138 441 Email: leipzig.office.box@mail.doc.gov http://www.buyusa.gov/germany/en/leipzig.html Munich U.S. & Foreign Commercial Service Mr. Bryan Smith, Commercial Officer Koeniginstrasse 5 80539 Munich, Germany Telephone: [49][89] 288 8754 Telefax: [49][89] 285 261 Email: munich.office.box@mail.doc.gov http://www.buyusa.gov/germany/en/munich.html

F. Other Country Contacts The U.S. Agricultural Trade Office in Hamburg closed in September 2002. All marketing inquiries for food and agricultural products should be directed to the Agricultural Affairs Office in Berlin. Office of Agricultural Affairs Clayallee 170 10117 Berlin, Germany Telephone: [49][30] 8305-1158

36

Telefax: [49][40] 8431-1935 Email: agberlin@fas.usda.gov www.usembassy.de/ato G. Washington-based USG Country Contacts U.S. Department of Commerce International Trade Administration Ms. Kelly Parsons Desk Officer for Germany Room 3513 Washington, DC 20230 Telephone: (202) 482-2177 Telefax: (202) 482-4098 Email: kelly_parsons@ita.doc.gov www.ita.doc.gov USDA - Foreign Agricultural Service Ag Export Services Division 1400 Independence Ave, SW Washington, DC 20250-1052 Telephone: (202) 720-6343 Telefax: (202) 690-4374

http://www.fas.usda.gov/

U.S. Department of State Germany Desk EUR/AGS/Room 4228 Washington, DC 20520 Telephone: (202) 647-2005 Telefax: (202) 647-5117 Email: www.state.gov U.S. Department of the Treasury Ms. Carol Carnes Germany Desk Officer 3107 NY Ave Washington D.C. 20220 Telephone: (202) 622-1235 Telefax: (202) 622-0134 www.ustreas.gov Office of the U.S. Trade Representative Office of Europe and the Mediterranean Executive Office of the President 600 17th Street NW Washington, DC 20508 Telephone: (202) 395-3320 Telefax: (202) 395-3974 www.ustr.gov U.S.-based Multipliers Embassy of the Federal Republic of Germany 4645 Reservoir Road, N.W. Washington, D.C. 20007-1998

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Telephone: (202) 298-4000 (switchboard) Telefax: (2020 298-4249 www.germany-info.org CMA - German Agricultural Marketing Board North American Office 1800 Diagonal Road, Suite 210 Alexandria, Virginia 22314 Telephone: (703) 739-8900 Telefax: (703) 739-8910 Email: feedback@cmnorthamercia.org www.cmnorthamerica.org German American Chamber of Commerce Inc. (Headquarters) 12 East 49th Street 24th floor New York, NY 10017 Telephone: (212) 974-8830 Telefax: (212) 974-8867 Email: info@gaccny.com www.gaccny.com German Representative for Industry and Trade Mr. Robert Bergmann 1627 I Street, NW Suite 550 Washington DC 20006 Telephone: (202) 659-4777 Telefax: (202) 659-4779 Email: Info@rgit-usa.com www.rgit-usa.com

Useful Websites

http://www.buyusa.de/en - U.S. Commercial Service Germany www.buyusa.com - U.S. Commercial Service trade matchmaking portal www.agbc.de - American-German Business Club www.amcham.de - American Chamber of Commerce in Germany http://www.useu.be/agri/ - the office of Agricultural Affairs at the U.S. Mission to the European Union has a very comprehensive website on EU food laws, import requirements, and duties and quotas. www.fas.usda.gov - The Foreign Agricultural Service website has trade and production statistics, exporter assistance information, marketing information, trade policy news and links to the attaché reports.

12: MARKET RESEARCH In FY 2004, CS Germany plans to report on the following topics: ITA Code TITLE AGR Agricultural Machinery APS Telematics BTC Funding Biotechnology COS Haircare CPT Servers CSF Security Software DNT Dental Equipment DRG Pharmaceuticals ECS E-Government EIP Semiconductor Production Equipment

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FRA Franchising GSV Direct Marketing HCG Tabletop Products LAB Laser-based Sensors PGA Printing Machinery PRE Plastic Production Equipment SEC Admission Control and Video Surveillance SPT Hunting Equipment and Accessories TEL Wireless Telecommunication Equipment TRA Market Trends in Travel and Tourism Agricultural Reports Attache Reports Attache reports provide information on market opportunities, crop conditions, new policy developments and information on the German food industry. Some standard reports include: Retail Market Report, Exporter Guide, Food Service Report, and market briefs on select products. Attache reports can be found at http://www.fas.usda.gov/scriptsw/attacherep/default.asp In recent years, many of the German reports have been consolidated and are submitted as EU reports. We recommend that companies interested in the German market also review the EU reports. American Food Directory The Agricultural Affairs Office has produced a food directory entitled "American Foods in Europe (AFE) 2001/2002 Directory of European Importers of U.S. Food and Beverage Products". The AFE directory contains listings of about 200 European companies, from 17 European countries, handling about 500 branded and a wide assortment of generic U.S. food and beverage products available in Europe. The directory is a useful resource for retailers, hotels, caterers, restaurants and others seeking to purchase U.S. food or beverage products but who do not wish to import directly. In addition to a hardcopy, an Internet version of the 2001/2002 Directory is available at www.american-foods.org An updated version of the AFE Directory is currently expected in October 2003. The AFE 2004 Directory will be expanded to include listings of European importers from the EU-25 countries. For further information please review the FAS Homepage and the FAS AgExport Services Division. The FAS homepage may be visited on line at: http://www.fas.usda.gov. 13: TRADE EVENT SCHEDULE October 2003 Date Event Location Post Activity 10/01-02

Modern emergency preventive systems

Hamburg

Hamburg

10/05-07 Golf Europe Munich Munich PLC 10/07-10 Interairport Munich Munich Hamburg/Munich 10/07-07 MBA Fair Hamburg Hamburg 10/07-09 MedTrade Atlanta Dusseldorf IBP 10/07-09 Biotechnica Hannover Hamburg CEO 10/08-10 Fachpack Nuremberg Dusseldorf SR/EE/EC 10/08-10 IKK 2003 Hannover Munich CT/EE/EC/SR 10/08-13 Intl. Book Fair Frankfurt Frankfurt Hamburg 10/14-18 FAKUMA Friedrichshafen Dusseldorf SR/EE/EC 10/14-17 ISSA Interclean Chicago Leipzig IBP 10/15-18 REHACare International Dusseldorf Dusseldorf SR/EE/EC 10/20-24 Systems 2003 Munich Munich SR/EE/EC 10/25-11/02 Hanseboot Hamburg Hamburg 10/27-30 A&A Dusseldorf Dusseldorf SR/EE/EC

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10/27-30 European Banking Insur Fair 2003 Frankfurt Frankfurt TF/PLC November 2003 Date Event Location Post Activity 11/05-08

AAIW- Automotive Aftermarket Industry week

Las Vegas

Frankfurt

IBP

11/06-09 BauFach 2003 Leipzig Leipzig SR/EE/EC 11/11-15 Agritechinca Hannover Leipzig SR/EE/EC 11/11-14 Productronica 2003 Munich Munich BIO 11/12-14 Brau Beviale Nuremberg Hamburg 11/14-16 Reisen und Freizeit Friedrichshafen Friedrichshafen Frankfurt SR/EE/EC 11/17-19 BIO Europe Frankfurt Hamburg 11/19-22 Medica 2003 Dusseldorf Dusseldorf CEO 11/19-23 Touristik & Caravaning Leipzig Leipzig Frankfurt SR/EE/EC 11/25-27 SPS/IPC/Drives Stuttgart Dusseldorf SR/EE/EC 11/26-12/06 Essen Motor Essen 11/28-30 Internationaler Reisemarkt Cologne Cologne Frankfurt SR/EE/EC December 2003 Date Event Location Post Activity 12/03-06 Euro Mold Frankfurt Dusseldorf SR/EE/EC 12/03-06 Turntec Frankfurt Dusseldorf SR/EE/EC January 2004 Date Event Location Post Activity 01/01-31 CMT Caravan Motor Touristik Stuttgart Frankfurt SR/EE/EC 01/09-11 Reisemarkt Rhein Necker Pfalz Mannheim Frankfurt SR/EE/EC 01/12-14 Super Show 2004 Orlando Munich IBP 01/13-18 DEUBAU Essen Leipzig SR/EE/EC 01/14-17 Heimtextil Frankfurt Frankfurt BIO 01/17-25 boot Dusseldorf Dusseldorf Hamburg 01/19-25 imm cologne Cologne Dusseldorf SR/EE/EC 01/19-22 International Builder’s Show Las Vegas Leipzig IBP 01/24-28 Paper World Frankfurt Hamburg? 01/26-28 AHR Expo 2004 Anaheim Munich IBP 01/29-02/01 PGA Merchandise Show Orlando Munich IBP 01/31-02/04 Christmas World Frankfurt Dusseldorf SR/EE/EC 01/31-02/03 ISPO Winter 2004 Munich Munich BIO February 2004 Date Event Location Post Activity 02/01-04 Kind & Jugend Cologne Dusseldorf SR/EE/EC 02/05-10 International Toy Fair 2004 Nuremberg Munich SR/EE/EC 02/07-10 CPD body and beach Dusseldorf Dusseldorf SR/EE/EC 02/07-10 Reevolutions Dusseldorf Dusseldorf SR/EE/EC 02/09-13 Bildungsmesse Cologne Hamburg 02/10-15 bautec Berlin Berlin Leipzig SR/EE/EC 02/11-15 Reisen Hamburg Hamburg Frankfurt SR/EE/EC

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02/12-15 fish international Bremen Hamburg 02/12-15 Shot Show 2004 Las Vegas Munich IBP 02/14-22 CBR- Caravan Watersports Tourism Munich Frankfurt SR/EE/EC 02/16-19 World of Concrete Orlando Leipzig IBP 02/17-19 Altenpflege/ Healthcare Hannover Dusseldorf SR/EE/EC 02/17-19 Envitec Dusseldorf Hamburg 02/20-23 Inhorgenta Munich Dusseldorf SR/EE/EC 02/24-26 APEX 2004 Assembly Process

Exhibition & Conference Anaheim Dusseldorf IBP

02/25-29 Home tech 2004 Cologne Dusseldorf SR/EE/EC 02/26-27 Fairway 2004 Munich Munich SR/EE/EC 02/27-03/02 Ambiente Frankfurt Dusseldorf BIO March 2004 Date Event Location Post Activity 03/01-31 Reise Camping International Essen Frankfurt SR/EE/EC 03/05-10 Internorga Hamburg Hamburg 03/7-12 Pittcon 2004 Chicago Frankfurt IBP 03/09-13 Musikmesse Frankfurt Frankfurt SR/EE/EC 03/10-17 CeBit ’04 Hannover Berlin CEO/BIO 03/10-12 EC 21 BioInvestor Munich Hamburg 03/12-15 GDS Dusseldorf Dusseldorf SR/EE/EC 03/12-16 ITB Internationale Tourismus Boerse Berlin Frankfurt BIO 03/14-17 Practical World Cologne Dusseldorf BIO 03/29-04/04 Bauma Munich Leipzig SR/EE/EC 03/29-04/02 electronicaUSA 2004 Francisco Munich IBP 03/29-04/02 Tube Dusseldorf Dusseldorf BIO 03/29-04/02 Wire Dusseldorf Dusseldorf BIO 03/30-04/01 Electric Power 2004 Baltimore IBP 03/03-03 fenster/ frontale 2004 Nuremberg Leipzig SR/EE/EC April 2004 Date Event Location Post Activity 04/01-01 International Franchise Corp. Washington Munich IBP 04/19-24 Hannover Fair Hannover Hamburg 04/20-22 Semicon Munich Munich SR/EE/EC 04/22-25 FIBO 2004 Essen Munich BIO 04/24-28 Pow Wow 2004 Los Angeles Frankfurt IBP May 2004 Date Event Location Post Activity 05/06-19 Drupa 2004 Dusseldorf Dusseldorf CEO 05/10-16 ILA 2004 Berlin Hamburg/Munich? 05/11-14 Analytica Munich Frankfurt SR/EE/EC 05/11-14 Control Sinsheim Dusseldorf SR/EE/EC 05/11-14 Wind Energy 2004 Hamburg Leipzig SR/EE/EC 05/13-16 Interzoo Munich PLC 05/19-22 Dach Wand- Roof Wall Munich Leipzig SR/EE/EC

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June 2004 Date Event Location Post Activity 06/08-10 GPEC 2004 06/15-19 Metav Dusseldorf Dusseldorf SR/EE/EC 06/15-17 SMT/Hybrid/ Packaging 2004 Nuremberg Munich SR/EE/EC 06/16-18 CeBIT America New York Berlin IBP 06/16-18 Die Zuliefermesse/The subcontracting

fair Leipzig Frankfurt PLC/BIO

06/22-25 Optatec 2004 Frankfurt Frankfurt SR/EE/EC July 2004 Date Event Location Post Activity 07/02-05 Kind & Jugend Cologne Dusseldorf SR/EE/EC 07/19-25 Farnborough Airshow Farnborough Hamburg/Munich ST 07/22-25 OutDoor 2004 Friedrichs

hafen Munich SR/EE/EC

07/25-29 AACC Clinical Lab Exposition Los Angeles

Dusseldorf IBP

August 2004 Date Event Location Post Activity 08/07-10 CPD body and beach Dusseldorf Dusseldorf 08/07-10 CPD woman/man Dusseldorf Dusseldorf SR/EE/EC 08/07-10 Reevolutions Dusseldorf Dusseldorf SR/EE/EC 08/15-17 National Hardware Show Chicago Dusseldorf IBP 08/27-31 Tendence Lifestyle Frankfurt Dusseldorf SR/EE/EC September 2004 Date Event Location Post Activity 09/02-05 EUROBIKE 2004 Friedrichshaen Munich SR/EE/EC 09/05-07 Gafa Cologne Dusseldorf BIO 09/05-07 SPOGA 2004 Cologne Munich SR/EE/EC 09/12-19 hogatec Dusseldorf Hamburg 09/14-18 AMB Stuttgart Dusseldorf SR/EE/EC 09/14-19 AUTOMECHANIKA Frankfurt Frankfurt BIO 09/16-19 IFMA 2004 (Bike world unlimited) Cologne Munich SR/EE/EC 09/17-20 GDS Dusseldorf Dusseldorf SR/EE/EC 09/18-26 InterBoot Friedrichshafen Hamburg 09/20-22 DIMA Dusseldorf Frankfurt SR/EE/EC 09/22-24 Aluminum Essen Dusseldorf SR/EE/EC 09/28-30 Materialica Munich Dusseldorf SR/EE/EC 09/28-10/03 Photokina Cologne Dusseldorf BIO 09/28-10/02 SMM Hamburg Hamburg 09/29-10/01 FachPack Nuremberg Dusseldorf SR/EE/EC KEY: IBP International Buyer Program (USDOC officially supported U.S. Trade Show) PLC Product Literature Center SR/EE/EC Sectoral Research/Event Evaluation/Exhibitor Counseling

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Agricultural Trade Shows in Germany The following are some of the major trade shows being held in Germany that are dedicated to the agricultural sector and products Note: The promotional events listed are provided for informational purposes only. No endorsement should be implied unless specifically stated. Terms and conditions of participation are the responsibility of the activity organizer. Please contact the organizer directly for further information.

Date Event Location

2003 October 3-9, 2003 IBA (International Bakers Show) Duesseldorf, October 11-15, 2003 ANUGA Cologne

2004 January 29 - February 1, 2004 IPM (International Plant Show) Essen February 1 -4, 2004 ISM (International Sweets and Biscuit Show) Cologne February 5-7, 2004 Fruit Logistica Berlin February 19-22, 2004 Bio Fach Nuremberg February 12-15, 2004 FISCH International & Seafood Europe Bremen March 5-10, 2004 Internorga Hamburg February 29 – March 2, 2004 ProWein Dusseldorf May 13-16, 2004 Interzoo Nuernberg September 26 –29, 2004 InterCool Duesseldorf

Note: More information about these and other German exhibitions and trade shows can be found under the following Internet address: http://www.auma-messen.de. This listing is also available on the website of the Agricultural Affairs Office at the American Embassy in Berlin www.usembassy.de

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